“Companies in the top-quartile for gender diversity on executive teams are 21% more likely to outperform on profitability and 27% more likely to have superior value creation.” McKinsey 2018 [1]
That one statistic alone sends a powerful message to company boards about the value of diversity. And it doesn’t stand alone. I could have equally quoted from a 2018 FCA speech [2] which revealed that firms with monocultures suffer 24% more governance -related issues than their peers. Or how about some Cleverpop research from 2017 [3] which revealed that inclusive teams make better decisions up to 87% of the time, delivering 60% better results; and they do so in half the time.
Now it has to be said that companies shouldn’t need statistics such as these as a spur to drive diversity; equality should speak for itself. But it equally has to be acknowledged that more work has to be done before we see every organisation benefitting from a true diversity of thought, background and experience.
Small wonder therefore that initiatives such as the government-backed Hampton-Alexander Review are still working hard to drive the diversity message. The Review set a target of 33% female representation on FTSE 350 Boards, Executive Committees and direct reports by the end of 2020. In an update issued on 1 July [4] and based on November 2018 figures, the Review revealed that in terms of board positions a 29.1% representation level across the FTSE 350 indicates that the target may be realised.
It has to be said that some companies are further down the diversity route than others leading Sir Philip Hampton, Chair of the Review, to comment: “The FTSE 250 is working hard to catch up but still too many boards have only one woman and remarkably today there are four all male boards in the FTSE 250.”
Diversity of training
Targets are one thing, building a culture which promotes and embraces diversity is quite another. The Hampton-Alexander Review quite rightly included direct reports in its targets as a means of building a diverse pipeline of future leaders. But those individuals are only going to be able to make the most of their skills and talents if they are provided with access to appropriate levels of training. In turn that means offering a true diversity of training methods and opportunities.
Quite simply, diverse people learn in diverse ways. For example, whilst one person may thrive on the challenge of self-study, another may prefer the discipline of a more formal classroom-based approach. Similarly, some may look towards bite-sized modules undertaken in tandem with their day to day tasks whilst others prefer to schedule time away from their desks.
This diversity of training needs requires organisations to be more open and forward thinking in their approach. Offering a mix and match blended learning platform will enable individuals to optimise their skills progression, thereby maximising the long term benefit to the company as they prepare for leadership. As Business Minister Kelly Tolhurst said : ”Diversity makes good business sense and those who fail to see this as a priority are missing out on the benefits that diverse leadership brings.”
[2] https://www.fca.org.uk/news/speeches/women-finance-keeping-pressure-progress
[4] https://www.gov.uk/government/news/ftse-350-urged-to-keep-up-the-pace-to-meet-women-on-boards-target
