Alexandra Bigland diversity, Blog, CSR...
“Not that old chestnut? Didn’t we cover that a few years ago? Take a look at our CSR credentials.”
If you think diversity is just a statistic for your CSR report, then think again. Several fund managers have said diversity is now the main driver for company investment, with investors wanting to know how diverse a company board and senior team is before buying shares.
Does diversity make a difference? Again several reports from banks, newswires and consultancies show that mixed gender and ethnic boards yield better company performances. What’s more, a board is less likely to take a ‘herd’ mentality on critical decisions – sometimes steering the company into that iceberg. Some reports have gone as far as pinpointing specific business disasters as the direct result of a lack of diversity at a senior level.
The gender results speak for themselves. The share price at Easyjet has increased 240% since Carolyn McCall took the job of CEO, and Imperial Tobacco has seen an 84% share price increase under the helm of Alison Cooper.
It’s common sense really. Half the world’s population are women, most cultures are indeed multi-cultural, and time and time again it’s been proven that socio-economic background is not a measure of talent. You’d be mad as a recruiter to rule out some 50% of the population, and even more so when you consider the diversity of your customer base.
Yet today only some 23% of FTSE 100 company boards have a woman, lower than the 25% average in the rest of Europe.
“The industry tends to recruit men to replace men,” said Fujitsu UK & Ireland Chairman Michael Keegan in a recent interview about the IT industry. His CEO Lucy Dimes replaced an outgoing female CEO.
It’s easy to think the world of business transformation, project and programme management or IT development is male dominated. Look again though at how you might change this through recruitment.
Mastercard and Lloyds Banking Group both have finalists for Women in Business awards at the project manager level.
Women are very good at transformation. Prior to running Severn Trent, Liv Garfield was responsible for BT’s superfast broadband rollout, managing a workforce of 22,000 predominantly male engineers. It’s safe to say your post man is indeed a man in most instances, but Moya Greene is CEO of Royal Mail.
While woman have made some headway into management, ethnic diversity has fared worse. You can count the number of non-white CEOs on one hand, only some 3% of UK board executives are from ethnic minority backgrounds.
While Tidjane Thiam was CEO of Prudential, shareholders watched their stock value steadily rise. Manjit Wolstenholme is the only non-white Chairperson of a UK company, Provident Financial plc. Again, the share performance since her appointment in January 2014 is on an upward trajectory.
Part of the problem for diversity is pipeline talent. Lip service and head nodding is not the same as recruiting a gender and ethnically diverse team at the non-executive level, in jobs such as developer or project manager.
Another real issue is “subconscious filtering”, by which recruiters often overlook candidates because they think “he or she won’t fit in”. Business transformation is in its very nature about bringing new ideas to the table, so someone with a different viewpoint from everyone else in the department is probably just what you need.
The subconscious is also what makes recruiters view thirty something women as potential hazards for maternity leave. Yet Helena Morrissey, former CEO, and now Non-Executive Chairman at Newton Fund Management was responsible for £50 billon of funds and nine children. She cites “flexibility at work” as key to her success.
The right person for the job is of course the best method of recruitment, but make sure you don’t close doors at the start of the recruitment process. A good job spec should not switch off applicants by gender or ethnic background. Be clear on the skills and experience you need and want, and open to candidates who might not fit the “corporate mould”.
If the fund industry thinks variety is the spice of life (and a key measure of company performance) then those with the responsibility of hiring should think so too.
At Venquis all our consultants are trained on our Diversity Commitment toolkit encouraging our consultants to both challenge clients’ hiring policies to boost diversity and work in partnership with them to select from a broad talent pool. If you need advice on your hiring strategy, our expert consultants would be happy to speak to you.