Making DE&I part of your DNA
As a female-led organisation we strongly believe that diversity, equity and inclusion (DE&I) should be front and centre of any business. There is growing evidence that companies with diverse boards, and in particular diverse C-suites, are not only witnessing positive changes in culture and decision-making protocols, but that they are also more profitable and better able to attract and retain clients, investors, and top talent.
Our team advocate and advise on best practice in the formation and management of family offices and investment portfolios, and the consideration of DE&I is a critical component of good governance for our clients in both the management of their private wealth and the businesses that they are operating.
It is heartening to see that awareness of the DE&I issues and understanding of the impact have reached a tipping point. From a pure ‘HR matter’, lack of gender and ethnic diversity has now become a widely acknowledged ESG risk, recognised by regulators and screened for by many private and institutional investors prior to deploying their capital. Amid the ‘great resignation’, it now seems obvious that providing equal opportunity to talented people irrespective of their background, is not merely good for business but can offer a competitive advantage in a post-pandemic war for talent.
We are also pleased that the case for DE&I now does not only rely on anecdotal evidence, one’s common sense or moral compass but is supported by a growing body of research.
We have included links to several reports that have been published at the time of writing of this blog. This list is not exhaustive, and we encourage you to look out for other good pieces of evidence.
Here we share some practical tools that we have seen work well and make a difference in some of the global, private and public, businesses that we have been involved with over the years and can be considered as best practice. Naturally our clients and readers alike would be at different stages of their own journey towards more equitable and diverse businesses. We hope that there will be something for everyone here – from useful pointers and tips to re-assurance that they are on the right path already.
Walking the talk
We believe the risks to business of not doing DE&I properly and paying it lip service are even higher than not doing it at all. Considering the impact of reputational risk alongside your personal or company values will help ensure your DE&I policies are genuine and purposeful.
There are four key areas of focus:
1. Attracting top talent
Setting clear and measurable recruitment targets (e.g. 50 per cent of candidates should come from diverse backgrounds) is key. Undoubtedly, it will make the recruitment process more lengthy and costly but sticking to it and expanding the candidate pool should be viewed as an investment – and it will pay off!
Increasingly, the younger generation in particular, view DE&I as an important part of feeling good in the workplace and the team around them, so clear and open policies may set you apart as employer of choice for high calibre talent.
Unconscious bias education and training has been high on the agenda. But organisations need to go one step further and ensure continuous feedback so that people are more aware of their unconscious biases in day-to-day life and that newly acquired knowledge eventually displaces the old habits.
2. Retention of talent
Flexible working, although extremely helpful and in many cases should now be a default option, is not enough on its own. Encouraging job share is also important, albeit it will increase costs to the employer.
Transparent performance measurement is essential. We have also seen how going one step further and publishing salary and bonus information of the senior team increases employee trust and is attractive to new talent in a highly competitive environment.
Leading an organisation through a time of crisis or a recession can be stressful and lonely, particularly if you are from a minority background. The boards should be there for the senior team to offer support, act as a sounding board and even as mentors.
3. Culture and values
As with most things, tone from the top on DE&I issues and behaviours demonstrated by the leadership team can influence the entire organisation. Diverse boards and executive teams set an aspirational example.
Nothing is more powerful than taking a bold action and stopping unacceptable behaviour, especially if the organisation’s culture needs to change.
Being authentic and sharing vulnerability should be part of the culture. Inclusive organisations start with leaders who are honest and open about not having all the answers and are willing to learn from and trust their teams.
Diverse and inclusive organisation are not just built from the top down, small but crucial steps taken at the grassroots can gradually change the entire organisation. Make sure people are not ostracised for speaking up and sticking to their values. Encourage open discussion, seek to understand the issues and where people are coming from.
Buddy up across organisation and encouraging allyship helps the leaders educate themselves on the issues and holds up the mirror to help them see their biases while supporting and accelerating diversity and inclusion at the grass route levels.
4. Embedding and implementation
We believe there is a strong case for aligning a part of the compensation of the senior team and the board to the business’s DE&I targets.
Embed the culture of checking-in. At the end of each team or board meeting ask two people how their experience at that meeting was and whether they felt included and empowered to contribute and speak out. Make this feedback informal and habitual.
When appointing an asset manager, adviser or vendor, ask to see their gender pay gap data and HR policies. You can also ask how they score themselves, where the gaps are, what they are doing to rectify these to assess if they are really embedding diversity throughout their organisation.
Final thoughts
The workplace is changing. You now need to be even more flexible and creative to bring greater diversity and inclusion to your organisation, make it genuine and root it in your company values.
Treat the costs of embedding DE&I as capital expenditure for future proofing your business. The return on investment may be slow but it will give you a powerful competitive advantage in the long term.
Post-pandemic burnout is real. Be mindful of it and offer support to your teams, especially those who might have to work twice as hard, particularly in the more junior roles, because they are a minority.
Despite frustration with the pace of change, we believe we are at a pivotal moment in our fight for more diverse and equitable businesses and society. The awareness is high, and the much need data-based evidence is there. There are also some great examples of change: NatWest managed to increase representation of women in global leadership roles to 39 per cent (including a female group CEO) and are on track for parity in 2030; Canaccord Genuity Group Inc., where I am a non-executive director, has 56 per cent female representation at the independent board level.
We should all be inspired by these examples, learn from them and constantly ask ourselves what we could do to accelerate the change. And we welcome your thoughts and any interesting research that you come across. If you require support in making the right hires, designing or reviewing your family office please get in touch.
contact@acorncapitaladvisers.com
The reports we found interesting:
https://www.fawcettsociety.org.uk/sex-power-2022
ILPA-Diversity-In-Action-Sharing-Our-Progress-August.pdf
https://www.bain.com/insights/making-progress-on-dei-why-inclusion-and-metrics-matter-most/
https://www.fca.org.uk/publication/discussion/dp21-2.pdf
https://www.bain.com/insights/women-in-finance-charter-blueprint/
