We need to talk about race. Because it directly affects the bottom line—and then some. Look to the much-quoted McKinsey study on ‘Why diversity matters’ and firms in the top quartile for racial and ethnic diversity are 35 percent more likely to outperform their median peers. Some estimate that we could add £24bn to the UK’s GDP, others predict more.
Anyone claiming an ounce of leadership acumen will know that making the best decisions requires a wide range of views, experiences and skills to challenge entrenched thinking, generate ideas and help mitigate risk. Regulators, policy makers, leaders and innovators are crying out for fresh ideas to deliver on the industry’s promises of performance and risk management to investors, shareholders and consumers.
Last week I chaired a packed house for the CityAM Club, the second in the “Decoding Diversity” series: ‘We need to talk about race’. The stellar panel (pictured) explored the many phases of career development from reaching into schools right up to support board ascension – and how we can make it work for all of us.
The UK government knows how important ethnic board representation is. The 2017 Parker Review recommended each FTSE 100 board appoint at least one director of colour by 2021 and each FTSE 250 board by 2024. So, how’s that going? Not so well.
FTSE 100 numbers have slipped from 9% in 2017 to 7.4% last year. This should not be a surprise. In response to the review, the Equality and Human Rights Commission revealed that only 2% of companies widely advertised non-executive director appointments on public channels, with just 1% for executive director roles. Personal (read Old Boys’?) networks are clearly alive and well. Any firm advertising more broadly could gain an immediate advantage.
Home-growing candidates for these senior roles also needs some work and the recruiters’ insights were shockingly revealing. According to the Equality Group, ethnic minority candidates in the UK face an uphill struggle from the start. More than 45% of young people of colour have been given career advice guiding them towards roles and career pathways lower than their academic achievement suggests they should follow.
Once in role, corporate and personal support to guide and encourage them in their journeys matter, too. Role models inspire a future pipeline; mentorship networking and sponsorship are also central to drive progression.
Talk to me about fintech – really, that’s my day job – and I’ll remind you of its human dynamic. And humans need strong leadership. Any commercial appetite to reap opportunity must come from the very top and there is real opportunity here.
Set the tone and culture, instil this into the leadership practices of hiring and middle management teams, consider the values and ethos of the organisation as whole, then measure and report it.
In our industry, we rely on data to show us the way. Firms that collect and honestly respond to their own data will understand faster than their peers why they are failing to attract and embrace ethnic minority talent.
Brochureware won’t cut it. Inclusion is revealed the moment a candidate steps through your door, in their every long-day-lived experience, and in their journey to leadership.
It’s 2020. Race and inclusion are not ancillary discussions, they are key business decisions for all of us. This talent must sit at the table and be supported to lead it.
We have to talk about race.
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