By Lord Karan Bilimoria
FOR business, the focus right now is very much on the future.
Short term, companies across the globe are understandably concerned about their recovery prospects from the Covid-19 pandemic and its economic challenges. Medium term, business leaders want to work with government on equally important challenges such as climate change.
Alongside these issues, however, is another – and it’s one where individual actions can have farreaching effects on company ethos, staff wellbeing and financial success.
I’m talking about diversity – a word which will mean different things to different people, but which at its heart is about inclusion and opportunity for all.
Earlier this month, the Confederation of British Industry (CBI) – working with major businesses including Aviva, Deloitte and Microsoft across sectors – launched a new campaign, ‘Change the Race Ratio’. It aims to increase racial and ethnic representation in British boardrooms and senior leadership teams through transparent aspirations and actions. Underpinning all of this must be the creation of an inclusive culture enabling talent from all backgrounds to thrive.
Each signatory to Change the Race Ratio makes four commitments to change. First, they commit to increase racial and/or ethnic diversity among board members and take action to set targets, based on the Parker Review findings. For FTSE 100 they commit to at least one racially and/or ethnically diverse board member by the end of 2021. FTSE 250 companies commit to at least one racially and/or ethnically diverse board member by 2024.
Second, signatories aim to increase racial and/or ethnic diversity in senior leadership at ExCo and ExCo minus one levels, setting clear and stretching targets and publishing them within 12 months of making this commitment. In addition, they commit to aim to establish a separate target for black participation at both levels.
The third commitment is to be transparent about their actions. Signatories commit to publishing a clear action plan alongside the targets and share progress in their annual report or on the company website, with an additional commitment to disclose ethnicity pay gaps by 2022 at the latest.
Finally, signatories commit to creating an inclusive culture in which talent from all diversities can thrive. This includes building a diverse pipeline of talent, fostering open dialogue and mentoring, transparent data collection and analysis, through to working with a more diverse set of suppliers and partners, including minority owned businesses.
Stated plainly like this, it doesn’t sound too much to ask, does it? Yet we have all seen drives towards such ambitions launched previously amid great public fanfare before ultimately achieving very little. So, what makes this different?
There is widespread recognition that warm words are not enough. Meaningful and permanent change is needed. That is as true in business as it is in any other part of our lives. Yet while there is no doubt that past attempts at increasing racial and ethnic diversity in the upper echelons of the business world have been well intentioned, progress to date has been painfully slow.
At present, there remains a woeful lack of diversity at businesses’ top table. In the UK, more than a third of FTSE 100 firms and more than two-thirds of FTSE 250 companies are still without any ethnic diversity in their boardrooms. Yet those same firms would recognise that true boardroom diversity is an important demonstration of a commitment to equality and inclusion. They know people – whether clients, customers or staff – want to see meaningful steps taken towards this goal.
They also recognise that inclusion is a key pillar of business success. Recruiting and retaining talent is easier in a supportive workplace culture, and opens new doors, too. What they may not know – but in these straitened times, will be keen to learn – is that the top-quartile of firms which embrace ethnic and cultural diversity within their leadership out-perform those in the bottom quartile by 36 per cent in profitability.
In short, embracing diversity makes sense in terms of business success, as well as being the right thing to do. While Change the Race Ratio aims to make an impact in the UK, the sentiment and call to action for meaningful change is relevant to every business around the world.
The CBI – and founder campaign members who are already supporting this drive – believe there has never been a better opportunity to instigate a diversity revolution. Change the Race Ratio aims to capitalise on the moment to accelerate the change that is urgently needed. We can do it if we work together.
If you would like to find out more about the Change the Race Ratio campaign, or the CBI’s Diversity and Inclusion Conference scheduled for November 30 and December 1, you can do so at www.cbi.org.uk.