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Fiona Hathorn is CEO of Women on Boards UK. Here, she shares her perspective on embedding diversity and inclusion at the board level.
Women on Boards UK is a network organisation that supports its members into the boardroom and works with boards to help them recruit for diversity. CEO Fiona Hathorn discusses the challenges of driving cultural change.
How well are professional services progressing with diversity and inclusion (D&I), particularly at a senior level?
“In professional services, accountancy firms are faring better than legal firms generally because they have been working on it for more years. But nobody is finding it easy because it requires effort, persistence and collaborative, effective leadership.”
Is inclusion sufficiently and broadly understood at board level?
“If you want to be inclusive and successful in managing a diverse team, you need to take it seriously, and many firms are currently only paying lip service to diversity and inclusion.
“The board should set the company’s values and standards. Board members have a duty to ensure that its obligations to its shareholders and others are understood and met, which means the board is collectively responsible for promoting the organisation’s success. Board members cannot do this if they don’t ensure that the organisation has the appropriate culture within to succeed. And to succeed, you need diverse talent. According to McKinsey’s latest Diversity Wins report, organisations that are the least gender-diverse are 19% more likely to underperform.
“A key question for boards is: why have the time, energy and resources dedicated to diversity and inclusion within many firms not yielded more results across the organisation? And why have outcomes varied so significantly between certain industries and divisions?”
How should non-executive directors (NEDs) get more involved in a firm’s D&I objectives?
“We believe NEDs should be asking these five questions. Firstly, how is our D&I performance helping or hindering our strategic priorities? Secondly, is the board getting regular updates on D&I strategy and progress against metrics, and are those metrics the right ones to support the board’s vision? Next, what are our gender and ethnicity pay gaps overall, and how do they vary across teams and divisions? It’s important to lead this agenda and not be limited by government reporting requirements.
“Board members also need to ask: at what stage of our talent pipeline does our diversity drop off, and is this the same for gender, race and other under-represented groups? How effectively are we tackling it?
“Finally, NEDs need to look around the table and ask if we bring insight into our staff and customers’ background and perspectives, and whether we have the necessary expertise around the board table to support our company’s culture, which crucially includes the ability to be inclusive.”
Could you explain how achieving effective D&I within a business is a long-term change programme, and is that sufficiently understood?
“Change involves doing something different with the intent of getting improved outcomes. It involves overcoming current problems and identifying specific issues relating to the lack of diversity in any one department versus another. There is complexity because not all division and department problems are the same, and some issues might be endemic in society. This means you need some breakthrough thinking and innovation to solve specific problems. Breakthrough thinking means accepting different types of issues within D&I that will inevitably necessitate different approaches to addressing them.
“More than half of change programmes fail because they do not follow the ABC of change success, as set out by Loup and Koller in The Road to Commitment. These are awareness, belief then commitment. In the D&I space generally, ‘belief’ is often missing within core management teams below the C-suite executive director level, which leads to resistance and tick-box compliance. This results in no real change in conscious inclusion, process-driven recruitment, and adherence to fair and open promotion practices.
“In a recent presentation to Women on Boards, a partner from Grant Thornton Australia noted that culture is not about keeping people happy, motivated and engaged but about setting the expectations that create the environment where these outcomes might result.
“Another core problem within firms that want to change is often the practitioners themselves. Many know little about the field they are charged to lead, usually more junior individuals who are charged with change and who simply tick the box and write ‘activity reports’. This group should, of course, be evaluating those activities to determine what outcomes were achieved against the objective.”
How effective are initiatives such as unconscious bias training in achieving change?
“There is no evidence that unconscious bias training works concerning making employees and leaders more collaborative. We believe in explaining to employees that we all have bias, but to think that we can change everyone’s deeply embedded and society-based biases with videos and training days is deluded.
“When leading change, we advise organisations to take a portfolio approach that acknowledges no single thing will be a magic bullet. This may include: working with managers and other gatekeepers, redesigning performance management systems, strengthening women’s confidence through upping their competence, the careful application of proxy metrics, and bystander behaviour training. These are things we have seen work well in organisations.
“Human beings are biased in every way, and we suggest you forget unconscious bias training. Better to be vigilant and keep remembering there is no magic bullet to creating and sustaining good cultures. Companies need to keep questioning and evolving their processes to ensure they are appropriate for your organisation or team.”
Does the pandemic and coming out of lockdown provide an opportunity for professional services to push the D&I agenda forward?
“Yes, but only if all employees actively manage their careers, including visibility in the new hybrid working world. Women on Boards UK, under our NexGen Directors brand, works with about 30 different companies as we encourage employees to actively champion their achievements, perfect their meeting management style and crucially understand influence.
“Professional services we find have, in general, more passive employees than found in most other industry sectors. This needs to change. Within professional services we find that line managers tend to be too focused on billable hours, which can result in them forgetting to take enough time to support their teams. Therefore we advocate individuals owning and driving their own careers and consider taking on a community board as part of a career development strategy. We work alongside many professional services firms including PwC, BDO and Linklaters encouraging and supporting their employees who want to join community boards.”