Diversity is good for business, and if you don’t believe that, your business won’t last long
Journalist Colette Sexton on how companies that do not support diversity are on the way out.
There might just be a crack in the glass ceiling, and through it, a glimmer of hope. Progress has been slow, almost glacial, but finally, we seem to be getting somewhere. Female representation on boards has hit 31 per cent, according to research from EY. Of course, 31 per cent is not 50 per cent, but this number is up from 24 per cent in 2017. An increase of 7 per cent in just two years means things are moving in the right direction.
Yet despite this progress, just 35 per cent of respondents to EY’s third annual Diversity and Inclusion survey said their company had taken appropriate measures to address the causes of any gender pay gap, and 38 per cent still say that men are more likely to be promoted in their organisation. So it is one step forward, but the other foot is firmly stuck in the past.
Only a fifth (26 per cent) of organisations have a specific programme in place to develop diverse leadership, while just 23 per cent of managers are held accountable by having diversity and inclusion targets tied to their performance metrics. Over two-thirds of companies said they ‘need more support’ from their senior leadership to advance diversity and inclusion significantly. Come on people, we can do better than this.
And while the majority of organisations (83 per cent) said they aspire to gender parity across all levels, 13 per cent explicitly state that they do not. I, for one, would like a list of these organisations so I can boycott them like they are boycotting equality. Since that is unlikely, I will just reassure myself in the knowledge that all the research proves companies that have diverse boards and promote equality among genders tend to make more profit. A study last year from the Boston Consulting Group which looked at 1,700 companies across eight countries, found that diversity in leadership teams increases the bottom line for companies. It showed that companies that have more diverse management teams have 19 per cent higher revenue due to innovation.
Hopefully, those old-fashioned companies won’t be around for much longer, and their existing employees will be hired by companies that appreciate the positive impacts that diversity can have. At the end of the day, companies need to make a profit. They are not charities. Companies implementing diversity schemes and targets are not doing so to feel good about themselves. They are doing so because they know in the long run, it will lead to more creativity, more innovation and more money.