Inclusion and Diversity – The CEO Perspective

The role of leaders in organisations is key to setting and (where necessary) improving culture. On 7 June 2023, several CEOs of various organisations of different sizes gathered at Fieldfisher's London office to discuss how they created and embedded diversity and inclusion strategies in their organisations.

Inclusive cultures start at the top of any organisation.

At a meeting on how to create and deliver inclusive workplace strategies, one of the key themes discussed was that inclusion and diversity had become a board-level issue. 

Many CEOs of UK and international organisations assumed their tenure at a time when inclusion and diversity was not deemed a board-level or even a key organisational issue.

In some cases, this has resulted in challenges and a need for targeted strategies, as opposed to relying on the organic evolution of corporate culture. 

Why is it important to promote diversity, equity and inclusion (DEI)?

The CEOs Fieldfisher invited to share their experiences agreed that improving culture in their organisation was the right thing to do and would lead to greater productivity. 

These business leaders also said they wanted to build businesses that were responsible and contributed to an inclusive environment.

It was agreed that having a more diverse board and workforce results in a more diverse range of views and therefore better decision-making.

However, the CEOs were clear they did not feel that diversity should be based on traditional protected characteristics like gender, ethnicity and disability. Instead their definition of diversity was much broader and more nuanced. 

Diversity of thought and skillset was seen as the most important attributes for a balanced board.

It was clear from the discussion that DEI is recognised as a business imperative – not least because of pressure from various stakeholders including investors, shareholders, customers and employees.

It was also recognised that having a positive and inclusive culture would help attract top talent. DEI is especially important for younger people who want to know what the organisation's purpose and DEI track record is before making a decision to join or remain with that employer.

What are the barriers to effective promotion of DEI?

The world of business is changing rapidly and many CEOs lack the confidence to engage in discussions about DEI. 

Lack of training on what constitutes 'good' DEI or acceptable language with which to talk about this issue is a major stumbling block. Business leaders, especially those in high-profile organisations, fear making public mistakes or having their views or intentions misunderstood. 

While massive change is sometimes required, overhauling or replacing processes and systems is a costly exercise in terms of both money and time. Consequently, boards often feel resources are better deployed on elements of the business that feature more clearly on a balance sheet.

Collaboration between CEOs, Chairpersons and the wider Board to agree a vision and a strategy is a good starting point, but without investment in education and engagement, the necessary baseline support from the senior leadership team is often not there, which means many initiatives and changes fail to gain traction.

Having a diverse board is a goal shared by most if not all CEOs, but it is not always clear how to achieve this without falling foul of positive discrimination legislation. And while a board can appear visually diverse, in terms of gender or ethnicity, hidden metrics such as educational background and life experience may not be catered for.

An additional challenge is that some industry sectors do not have diverse talent pools, which makes it difficult to hire diverse candidates. One solution to this could be investing in training and improving skills after the recruitment process.

Regulatory guidance for businesses on diversity has resulted in some unintended consequences. For example, the Financial Conduct Authority (FCA) has set diversity targets on gender and ethnicity using Office for National Statistics (ONS) classifications, which are proving problematic for some organisations, particularly international businesses.

Where can businesses go wrong when trying to promote DEI?

Using general terms as a way of measuring diversity such "BAME" or "LBGT" could have the effect of artificially grouping individuals. 

The solution to this is likely to be more specific granular information and data.

Further, if someone feels that they have only been given a position to fill a "quota" they are unlikely to feel valued.

The most important challenge was the failure of organisations to adopt a nuanced approach to different situations. Setting targets for particular obvious groups and not seeing DEI as important for all employees could lead to negative consequences and a lack of engagement.

Top Tips for promoting DEI

• Don't be afraid to get things wrong, mistakes are an opportunity to learn.
• Testing is important: Trial new DEI initiatives and policies in the same way as you would trial new computer systems.
• There is no one size fits all approach.
• Don't fear starting from a blank state. It's normal, especially if for example if you are setting up a new business.
• Education can be more effective than setting rules. Rather than saying "X% of board members must be Y", have the discussion and share the evidence that having certain views would be valuable and why. Aim for a balanced board rather than fulfilling targets.
• Always look at your own organisation honestly. Perform deep analysis. Do not be satisfied with service level diversity data.
• Do not aim for diversity for diversity's sake, recruit the required diversity skillset.
• Don't rush the process. Take the time to get things right in terms of a vision and strategy and implementation will be more effective in the long run.
• Role model good behaviour and others in the organisation will follow.
• The people driving change and asking the tough questions about DEI are often younger. Take this into account and ensure there is diversity of age even at board level, and that views of less senior team members are sought and given equal importance.
• There should be consideration for DEI in everything that is done. It's not the responsibility of one function in a business.
•  Modernisation is never fully achieved. A business should not rest on its laurels because it is in a good position, but should constantly strive for continuous improvement.
• Good ideas can be implemented incorrectly and lead to negative outcomes. Perpetual review and amendment should be utilised to lessen this possibility.

Practical Examples

• Forming a group or groups that are specifically tasked with promoting DEI, ensuring there is representation from all areas of the organisation who are encouraged to contribute their views.  This can be far more effective than setting up various employee representative groups for specific protected characteristics which often fail to co-ordinate their activities and thoughts.
• Arrange meetings between executives and junior staff members to engage them in discussions about what they feel is working well and what could potentially be implemented to improve diversity and foster inclusion.
• Conduct regular employee surveys to gauge employee satisfaction and find areas to improve;
• Review hiring and promotion decisions, rather than setting targets, has helped to ensure biases are less likely to affect the outcome, without undermining the fairness of the selection.
• Ensure that there is a diverse short list of candidates for a position and then choose from that short list with only suitability and skillset for the role in mind.  This can help to ensure that a diverse range of candidates are given proper consideration, while retaining suitability as the primary factor in the decision.
• Review job descriptions, particularly for senior roles, carefully.  They do not need to be too specific or artificial.  The role description should have enough space to allow diverse talent to show itself.
• If an area of hiring or promotion bias presents itself, recruit candidates who are the subject of this bias to be part of the decision making process moving forward.