Anger is flaring, statues are toppling, tension is high. With #blacklivesmatter and #metoo, there is a powerful wave against social injustice. Business, which is the vehicle for creating wealth, clearly has a role to play in ensuring that all can participate in economic opportunity and that ethnicity and gender are no barriers to success. Many businesses have responded to the recent unrest most notably perhaps Ken Frazier, CEO of Merck, with a powerful personal speech, and Alexis Ohanian resigning from the Reddit Board “[urging] them to fill my seat with a black candidate”.
Business also needs to be authentic: practicing what is preached and contributing to the key areas where an individual business can make a difference and drive change. Fidelio builds Boards and leadership teams. Business leaders have a pivotal role to play in ensuring greater diversity – with all its benefits – throughout the organisation. Through our core business model and day to day assignments, there are three key areas where Fidelio is contributing to increasing diversity in business:
1. Search: We used to hear frequently that the major challenge with increasing women on Boards was one of supply. This argument is seldom heard nowadays. There are self-evidently enough good women. But we still hear the supply argument cited in the case of BAME candidates. Companies cannot simply wait for the massive societal change that this gap in supply and demand implies.
Indeed, there is a powerful case for focussing on what you can influence today. Research demonstrates that spending time up front on role definition – what does the role need to deliver and how it is aligned to the strategic objectives – greatly increases the likely success of the Search. Shifting the focus to the role importantly shifts focus away from where the candidate is likely to be found. This intellectual liberation significantly opens the field of good candidates and is well within the company’s reach.
Fidelio’s Search methodology is predicated upon the simple acronym of DAD – Define, Align, Deliver. It in turn yields results and 40% - 50% of our Searches contribute to an increase in diversity in particular gender and/or ethnicity. This is one of most important contributions Fidelio can make to increasing diversity in business and we are consistently looking to make a greater impact.
2. Developing the pipeline: Business cannot postpone progress on diversity until society has been fixed. There are immediate actions business can take to increase diversity in terms of the Search process. Equally business has the resource and influence to contribute to fixing society. If a leaky pipeline is the problem, learn how to fix it.
Again, lessons can be drawn from the progress that is being made on increasing women in the Boardroom. Fidelio developed “A Seat at the Table” to demonstrate the strength of the female pipeline of Board candidates; in the meantime, we are very pleased that it has become recognised as an innovative Board learning programme addressing the most pressing issues on the Board Agenda, including diversity. Our contribution is threefold:
We have been joined over the years by a very diverse range of participants and speakers bringing insight and perspective from Africa, Asia, the US and Europe, including BAME Chairs and business leaders and diversity experts. Intersectionality is absolutely recognised.
The success rate of Alumni moving into more senior Board roles (as both Executive and Non-Executive Directors) demonstrates that a diverse talent pipeline does exist
And critically we ensure that Alumni have a robust understanding of the Board’s role and responsibilities in promoting and embedding diversity, as well as contributing to a strong and diverse pipeline.
3. Evaluating the Board: Diversity can no longer be consigned to the too difficult category. Boards are today assessed on their effectiveness. Cognitive diversity is the holy grail – and is surely not possible without diversity of experience and insight. Key aspects of Board effectiveness are:
The diversity of composition and perspective
The ability of the Chair to harness that diversity in all aspects of the Board’s work
The Board’s contribution to diversity throughout the business.
Following the recent “Review of the effectiveness of independent board evaluation in the UK listed sector” prepared by ICSA, Fidelio argued strongly in favour of a forward-looking approach to Evaluation rather than a tick box style audit. Given the complexity facing Boards, achieving greater diversity in its many dimensions has to be a core component of increasing effectiveness. As such Fidelio Board Evaluations review all of the aspects of diversity set out above and provide the Board with practical recommendations how diversity and inclusion can be embedded in the work of the Board and throughout the organisation.
Diversity and ESG – The Way Forward
There is also a broader dimension to diversity. Covid-19 has underscored the interest in ESG, particularly with regard to the “S” or social dimension. In our work with a broad range of organisations to embed ESG at both Board and Executive level, Fidelio sees a common understanding that the “S” is absolutely about employees and society; it is therefore also about diversity and inclusion.
There is undoubtedly an opportunity as working practices, corporate planning and strategy are all thrown up into the air, to make significant progress on diversity. This is a time of change and building back better will only happen if business can provide greater access to and equality of opportunity.
Recently Fidelio was asked as part of the NYSE Expert Call Series: ‘Key Roles for the New Normal – Takeaways for Boards and Critical Corporate Functions’, how can Boards ensure that diversity does not become the victim of Covid-19?
We very much stand by the answer we gave then: use the opportunity provided by change and disruption and use the tools that ESG avails. Go back to basics and to purpose. Practice what is preached and understand what are the material ways in which your company and Board can make a difference and move the dial on diversity. This is certainly a thread that runs through Fidelio’s ESG Leadership GRID; and in this Overture we have set out our focus on diversity in all its richness and how we can best contribute to making a difference, increasing opportunity and surely benefiting business as well as society.
We’d welcome the opportunity to engage with you and your organisation on diversity. For further details, please contact Gillian Karran-Cumberlege on firstname.lastname@example.org.