Lydia Brook - Trainee Wealth Manager
Diversity and inclusion: it's been a topic difficult to avoid the past year. The subject has been prevalent across newspapers, social media, film and television throughout 2018. Coverage has ranged from the shocking stories to come out of the #metoo movement, to the stark realities of the BBC Gender Pay Gap Report. But why has this subject sparked such profound debate?
Often, there can be a lack of clarity about what diversity and inclusion really means in the business world, and in some cases, a lack of understanding around why it matters. For many, diversity and inclusion has become synonymous with gender, in particular, raising both the representation and progression of women in the workforce. However, this is just one slice of a much larger pie. To take the Oxford Dictionary's definitions:
Diversity: "Showing a great deal of variety; very different"
Inclusion: "Allow someone to share in activity or privilege"
Diversity and Inclusion for any business, put in very simplistic terms, means employing and retaining a group of different people. This difference can be gender but it can also be ethnicity, religion, disability, sexuality and so much more. 'Diversity' is thought to bring a wider range of ideas to the table, while 'inclusion' facilitates more effective implementation and execution of business objectives. To put it simply, diversity is being invited to a party and inclusion is getting up on the dance floor!
There are a number of studies to support that employing a diverse and inclusive workforce results in improved business performance. This could be down to decisions benefitting from a variety of perspectives and skill sets, or innovation and creativity being nurtured by a range of personalities. One particularly wide-ranging study of 350+ public companies carried out by McKinsey1 in 2015 examined Diversity in the workplace for several years across different industries in Canada, Latin America and the UK. The findings showed that businesses that are more diverse delivered outperformance in terms of profit. For example, companies in the top quartile for ethnic and racial diversity are 35% more likely to have financial returns above their national industry means, while companies in the top quartile for gender diversity are 15% more likely to have financial returns above industry means.
Another well-regarded study recently picked up by Forbes, conducted by Cloverpop2 in 2017, makes the case for inclusion. It analysed 150+ companies and nearly 600 business decision makers over two years, concluding that inclusive teams (including geography, age and gender) on average make better decisions. Cloverpop cite "more perspectives, experience and information, which help reduce cogniative biases and improves accountability" as the drivers for the better decision making. For some, perhaps a more compelling statistic is that teams that practice inclusiveness make decisions in half the time than those that do not.
It is true that each company, and industry, face their own challenges, some of which are insurmountable for a single company to battle on their own. Some companies are small and focused on financially staying afloat, while others are challenged by the lack of diverse talent qualified for their roles. But is this reasonable grounds to ignore the topic altogether? I believe that every company has a responsibility to consider how they can do more, and also recognise that doing so could pave the road for outperformance in the future.
So, how do companies and individuals become more diverse and inclusive? Partnering with other firms who are further along in their diversity and inclusion activities to get advice and follow what they have done, talking to children about their GCSE decisions and the impact their chosen qualifications may have on their career, or introducing a mentoring programme across the company. It is important to remember there is no "right way" to improve diversity and inclusion, and certainly no easy way to measure it, but there are numerous ways for firms and individuals to make it a part of their every day.
LGT Vestra launched #included in 2018, an internal initiative with a focus on diversity and inclusion, in recognition of the importance it can have to a workplace. A steering group is now in place, working together with the Management Board and employees to both improve and celebrate diversity and inclusion across the business. We have embarked on a number of different projects ranging from volunteering with children aged between 8 - 18 to inspire and challenge perceptions, reviewing and enhancing our internal policies to support a rich and diverse pool, hosting lunches with a range of inspirational speakers and introducing an internal mentoring programme. This is just the beginning of an exciting journey and we endeavour to ensure LGT Vestra remains a highly desirable, inclusive firm for our people and our clients.