Diversity and inclusion: Unequal shares
We are not born equal – and COVID-19 has highlighted or exacerbated many deeply entrenched inequalities in UK society. These inequalities may stem from our class, race, sex, sexual orientation, age, disability, education or even regional accent, but they are alike in one way: some of your customers and current and potential employees will identify with at least one of them. If only for good business reasons, therefore, your organisation needs to appreciate the benefits of genuine diversity at all levels.
While we have laws forbidding direct discrimination on the grounds of race, religion, sex or sexual orientation, recent events have highlighted how much deeper the issues go – and how more can be done. Ethnic minorities are more likely to contract and die of Covid-19 and to be stopped by police. They are less likely to be in the most senior jobs and positions of authority. The furore over UK school exam results demonstrated how those in power could fail to spot the flaws in an algorithm that favoured children at selective, fee-paying schools and downgraded those at schools with less middle-class demographics, seriously affecting admissions to top ranking universities.
The fact that this is bad for business is well documented. While businesses benefit from a strong corporate culture, “group-think” at the top and lack of challenge and fresh ideas is never a recipe for long-term success. If you have no insight into the thoughts and daily lives of a large segment of the population, you are unlikely to sell effectively to them. Diverse experiences among managers – if listened to and acted upon – can open up fresh ideas and lead to innovation. They can also identify risks or reasons for potential failure that may be missed if all the decision-makers share the same viewpoint and background.
So where are we now?
Gender
The Hampton-Alexander Review, an independent body that builds on the work of the Davies Review, announced in February that its goal of 33 per cent female representation on FTSE 100 boards by 2020 has now been reached. This sounds promising.
However, Denise Wilson, CEO of the review, pointed to a dearth of women at the most senior levels: “There are over 900 women now serving on FTSE 350 boards, providing an ever-increasing pool of women with substantial board experience. Yet, only 25 women have been appointed into the chair role, even fewer as women CEOs, and [this shows] little sign of change,” she stated.
Frances Hawkins, managing director at Goldman Sachs and chair of the Chartered IIA’s Women in Internal Audit network (WIIA), is concerned that women may fare less well than their male colleagues as the profession comes out of the pandemic and returns to the new normal. In particular, she cites challenges in obtaining childcare, as many provisions are not re-opening and au pairs may be unable to travel before the start of the new academic year. “We are hearing from the WIIA members that many working parents feel they’ve gone back to the 1950s as they’ve been juggling their careers, the childcare, the home-schooling and the domestic tasks of running a home,” she says.
She also worries that women may be more likely than men to turn off the camera and mute their microphones in virtual meetings and that this will affect their visibility in organisations.
“This is why the steering committee for the WIIA got together in April. We looked at these issues and we set up a webinar on development, progression and transferable skills (and how to ensure your skills are recognised),” she says. “We did another in June, with a panel of audit committee chairs, about how internal audit adds value to organisations. We wanted attendees to appreciate fully the value they add and how they can position themselves for future opportunities.”
Hawkins and the other committee members are now looking to the post-Covid era and talking to black internal auditors to find out what issues they face at work. “We all need more education about diversity. Many organisations have excellent programmes, but we need to broaden our networks and go much wider – so, for example, diverse professionals should be encouraged to network with others outside of, as well as with, their self-identified group,” she says.
In addition, she says, internal auditors must be more aware of diversity across the spectrum. While internal audit seems to have “moved the needle” for women in the profession (at least before Covid-19), she says it’s much harder to point to black heads of internal audit. More positive role models are essential to attract a wider range of applicants to the top jobs. Hawkins believes that sponsorship from senior managers is essential.
“I was given a sponsor on the management committee. I was initially terrified of him, but it was a great opportunity for me. He gave me crucial introductions and opened doors, and I gained confidence because I knew that if I could present to him, I could present to anyone,” she explains. “We need to help senior management be more aware of their power and how they can use it to add value to diverse professionals.”
Hawkins is also keen to share some of the lessons that women have learned about improving their opportunities more widely with other underrepresented groups. “Many equality issues transcend any one population, and we can learn from each other,” she says.
Race
In 2017, the UK government’s Parker Review, headed by Sir John Parker, former chair of Anglo American (sponsored by EY), reviewed ethnic diversity on UK boards. It found that 51 of FTSE 100 companies had no directors of colour and that non-white directors comprised just eight per cent of total directorships (the proportion of people of colour in the wider population is just under 14 per cent).
Moreover, seven companies were responsible for appointing 40 per cent of the directors who identified as coming from an ethnic minority group. Just six people of colour held chair or CEO positions.
The review recommended that every FTSE 100 board should have at least one director of colour by 2021 and that every FTSE 250 board should meet the same target by 2024.
Three years later, an update showed that 37 per cent of FTSE 100 companies that participated in the Parker Review survey still did not have at least one director of colour, while 69 per cent of the FTSE 250 did not meet the target. By early 2020 six people of colour were chairs or CEOs in FTSE 100 firms.
Ololade Adesanya, a director in EY’s EMEIA financial services practice, who also chairs the firm’s Financial Services Race Steering Committee, agrees with Hawkins that organisations have become more “fluent talking about gender than about race”, and that they now need to use their relative success in one area of diversity to boost their success in another. Adesanya is particularly keen to increase awareness of unconscious bias, microaggressions and how the combination (or intersectionality) of gender, race and social deprivation can further disadvantage some people in the workforce.
“It’s no longer enough not to be racist, organisations need to be proactively anti-racist,” she explains. “At EY we are looking at more proactive ways of measuring progress. We have disaggregated the term BAME and are now looking at all racial minorities separately when we scrutinise the make-up of our workforce. We’ve previously disclosed pay gap data on ‘BAME’, but we have now committed to disclosing our black pay gap data.”
Like Hawkins, Adesanya is concerned that the move to more virtual meetings may disproportionately disadvantage women and ethnic minorities if these groups prove more likely to mute their microphones and turn off their cameras and are less likely to draw attention to themselves. This is exacerbated by the fact that people with different accents can be hard to follow if you can’t see them clearly. Along with colleagues at EY, she has launched an Internal Audit Network Forum to empower internal auditors from ethnic minority backgrounds to progress to leadership positions and to encourage internal audit professionals to talk more openly about race and ethnicity in the workplace.
“Women and people from ethnic minority backgrounds are frequently found to undersell themselves,” she says. “People perform better when they can be authentic and true to themselves – their whole selves, not a version of themselves they feel is expected from the corporate environment. We need real and authentic diversity to thrive, and this is why it is key that interview panels in particular must become more diverse and representative. Allies have an important role to play in the diversity and inclusion agenda. Throughout my career, I have worked predominantly with white men, and witnessed first-hand what the dominant culture and mindset in corporate Britain is, but I have always been encouraged to maintain my authenticity and be my true self. We need radical change before we can expect minority behaviour to change for the better – it is hard to go against the current, until you have a seat at the table.”
Diversity is too important to rely on a few influential role models to push ahead, Adesanya adds, although of course it has to be supported proactively from the people at the top. EY, like other organisations, is introducing greater accountability for leaders and people in positions of power who do not meet diversity objectives. “This is a big shift. People like me must be involved because we are part of the story and know the context, but change needs to be driven from the very top of the house,” she explains. “I have two sons and the narrative for black boys in the UK right now is not great. I want to help change things so that they go to work in a different kind of world.”
LGBTQ+
According to McKinsey, in the US 206 major corporations signed a brief supporting the Supreme Court’s decision to protect LGBTQ+ individuals from workplace discrimination, which was passed in June.
However, McKinsey adds that a growing business case for inclusion “has not translated into solid gains for the LGBTQ+ community within the workplace”. According to the firm’s Women in the Workplace research, LGBTQ+ women are more underrepresented than women generally in large US corporations. Just four openly LGBTQ+ CEOs head these corporations, only one of whom is female and none of whom is trans.
Its research found that LGBTQ+ women and trans employees often feel isolated and that LGBTQ+ women face increased rates of sexual harassment and discrimination. Trans employees face a distinct set of obstacles to performance and career progression.
Employees who face “onlyness” across multiple dimensions feel under increased pressure to perform, researchers added. LGBTQ+ women of colour are eight times more likely than straight white men to report onlyness and are also more likely than women or straight men to report “microagressions” (see page 37).
Paul Skinnider, senior internal audit manager at Taylor Wimpey, first became aware of diversity issues when he worked in internal audit at a large bank. “I found that as a gay man I was spending time and energy filtering out comments and acting the way I thought I had to act,” he says. “So I volunteered to go on a two-day authentic leadership course run by Stone-wall and it was inspirational – for the first time I was in a room of LGBTQ+ people, so didn’t feel I had to monitor what I said and could redirect that wasted energy.”
He found the experience “energising” and returned to work confident that he could be more honest about himself, and keen to help colleagues do the same. He became involved with the company’s Rainbow Network and helped to spearhead a project encouraging people to “bring their whole selves to work”, creating safe spaces and attracting a supportive senior management sponsor to the project.
Further initiatives involved working with different minority support groups, such as the organisation’s BAME network, and developing reverse mentoring programmes. “It was all about encouraging people to speak freely about who they are, what they feel and what makes them uncomfortable. I know some people came out at work as a result and that made me really proud of the work we had done,” he says.
One important development was a group-wide “words count” initiative. If anyone said something that had offensive connotations or could be seen as hurtful, any colleague could say “words count” and this could prompt an open, constructive conversation about why it made some people feel awkward or stressed.
Skinnider took his ideas and experiences to the Chartered IIA. He ran an event supported by many chief auditors and then launched an LGBTQ+ network for internal auditors. Other senior institute members agreed to host events, including a launch event for auditors in Scotland, although these were then postponed by Covid-19 restrictions. “I want the first events to be face-to-face because I want to make people as comfortable as possible,” he explains.
Now six months into a new role at Taylor Wimpey, Skinnider is encouraged by the continued development of the organisation’s diversity programme. “There’s already a change in the language so that diversity is not a question of ‘have to’ and ‘why’, but about ‘will do’ and ‘how’ and this is important,” he says.
“People think construction is a male-dominated sector, but the chair of Taylor Wimpey is a woman and we have a gender-balanced board and executive team, so we’re already in a strong position to build on diversity in the sector,” he adds. “There’s a recognition that we need to improve our BAME representation, but we have a good programme for graduate trainees, management trainees and apprenticeships, so we can start to influence change through this. A reverse mentoring programme was introduced last year to support BAME development and progression, and we’re also starting to introduce affinity groups to improve support.”
While targets for diverse representation can be controversial, Skinnider points out that they encourage firms to measure indicators. It doesn’t mean that the wrong people get jobs, he says – after all, you could say that the wrong people get the jobs if you don’t attract diverse applicants.
The next step is to focus on senior management roles. “If you don’t measure, it’s easy to assume that the talent doesn’t exist or isn’t interested in your sector or business. This may be true, but you need to substantiate it and you may need to re-examine your requirements or develop talent internally,” he says.
He argues that all businesses need to build products or services that resonate with the widest range of customers and that contributions and challenges from a correspondingly broad range of employees and managers are vital. “This needs support from the top, because otherwise a groundswell of change from the bottom can be blocked. Internal auditors are in the business of providing opinions and they need to monitor developments and ensure that they build on all their relationships and gather all views so they know these are being considered at the highest levels.”
It’s equally important that internal auditors feel comfortable being “authentic” at work, he adds. People who are not genuine find it harder to win people’s trust and get them to speak openly and also tend to be more stressed and preoccupied with themselves.
“Diversity leads to inclusion and if you’re inclusive you create a more diverse workforce,” he explains. “You need to create an environment where honest conversations take place and people educate each other and are true allies. This is not just about what people look like – many differences are hidden from view and it’s best if everyone is attuned to the way different people feel, even if they are not directly affected by negative comments or attitudes.”
In addition, he adds, open debate, reverse mentoring and ally programmes give senior managers a pool of people to run ideas and announcements past – before they are broadcast and lead to unintended consequences. “You want to ensure that the message that is received is the one that is intended,” he says.
The broader picture
In 2010, 56 FTSE 100 firms had a board diversity policy – all of these focused on gender diversity. By 2018, 98 FTSE 100 and 88 per cent of FTSE 250 companies had a policy, and around a third of these covered ethnicity as well as gender.
The FRC’s latest annual update on the UK Corporate Governance Code showed that only one or two FTSE 100 companies reported their approach to LGBTQ+, age and disability diversity. Research from INvolve found that 33 of the top 100 firms did not specifically mention LGBT+ topics in their annual reports.
“We expect to see an increase in more detailed commentary on all aspects of diversity in future disclosures,” the FRC said. “It’s not always clear whether there were targets related to diversity at board and senior management level, and if so, what actions were being taken to achieve these targets or wider objectives.”
While it’s clear that understanding about the value of inclusion and diversity is increasing – and many organisations are spending time and money to make their workplaces more diverse and to promote people from different backgrounds to senior roles, there is still much to be done. In particular, inclusion can be weak in areas that have been less well-publicised or where there is still stigma that can inhibit honesty, such as health issues (mental and physical).
Internal auditors can play an important role in monitoring and measuring progress and can highlight cultural barriers and risks caused by a lack of diverse views. They should be challenging received wisdom and unquestioned assumptions wherever they find them and should use their unique view of, and relationships across, their whole business to highlight potential weaknesses and cultural problems.
For those seeking to gather views and ideas from the widest possible network, the Chartered IIA can help to connect you with others across the UK and Ireland. After all, what is diversity if it is not learning from each other?
Microaggression
The WEF has identified 14 examples of “microaggressions” – things that people commonly say to people from minority groups without realising that they are offensive. Some of these may seem innocuous, however their implications and veiled hostility, or inference that the recipient is “other” or “inferior”, create long-term stress and negative feelings that can affect their happiness and confidence and their ability to be themselves in a work environment.
What makes microaggressions so toxic is that they are subtle and can be hard to call out or to challenge. The recipient may fear that reacting will make them look super-sensitive or insecure. Some may not even register the full implications, but will just feel vaguely insulted or uneasy around the person or group making comments.
Common examples include: “You’re so articulate”, “Where are you actually from?” and “The way you’ve overcome your disability is so inspiring”. They may sound like compliments, but they’re not.
Outside the vacuum
Film-maker Park Rojanachotikul was ten when he moved from Thailand to New Zealand. Having just completed an MA in media practice in social change and development at Sussex University, he has thought much about race and diversity during the pandemic and the Black Lives Matter campaigns.
“Even now I feel uncomfortable trying to ‘fit in’ to western culture. I still find it hard to express to peers how I feel about being non-white in a predominantly white country,” he says.
His research has increased his awareness of the ways in which our cultural perceptions of race are embedded in our colonial history. “Views about race are deeply rooted in the pseudo-science that emerged during colonialisation and was used to justify a hierarchical approach to western domination. We need to look for ways to decolonialise education,” he says.
He also believes we should examine the well-meaning “white-saviour complex” that comes out in the way some NGOs campaign for donations – and is evident in some of the language and politics of diversity in organisations and organisational outreach programmes.
“Diversity can’t be thought of in a vacuum, and just looking at the colour of someone’s skin when you hire them won’t necessarily make your organisation think in a more diverse way,” he adds. “If all your managers are from the same background then how diverse are they – regardless of what colour they are? Too many corporate cultures still tend to cull the people who actually think differently because they’re seen as not ‘fitting in’ and this doesn’t necessarily reflect their skin colour.”
Despite being highly educated with a background in both western and Thai cultures, Rojanachotikul has seen plenty of examples of bias and thoughtless insults. When looking for a house to rent in Sussex with his white English wife, she was advised to use her name when registering with rental agencies. And when he won prizes at school people would say: “Oh he would win that – he’s Asian.”
“My name was always something to laugh at in New Zealand and I would laugh along. I’m used to people judging me by it,” he says. “It’s only more recently that I’ve started to question this.”
His experience of living in three different cultures has also made him aware of the way those in authority perceive people. “The more people I meet in business in the UK, the more I realise that they big themselves up the whole time and I wonder whether this is something I’m supposed to do to get ahead,” he says.
“This is not so common in New Zealand and certainly not in Thailand, where even the most talented people I worked with tended to be humble. If you don’t compete, you are labelled as “shy” or “quiet”, with the implication that you won’t be a good leader.”
Cultural awareness is important, but Rojanachotikul adds, we also need to be more accepting of different ways of doing things. “There’s no one right way to do things well and too often we lack diversity of attitude and approach.”
For details about the Chartered IIA LGBTQ+ network contact Paul Skinnider via LinkedIn.
This article was first published in September 2020.