A fortnight ago I stood up to deliver a key note speech at the Women’s Business Forum conference. I took up the opportunity to discuss the importance of promoting diversity in the workplace with relish, as it is a topic that has been at the forefront of my mind throughout my career.
Women and their promotion to top flight positions is an important part of the picture. Despite the notable announcement a few weeks ago that Janet Yellen will become the next Chairman of the Federal Reserve – the first woman to occupy the post – there remains a lot of work to be done if women are to have the same opportunity to acquire executive positions as their male counterparts.
A recent report by the Office for National Statistics (ONS) found that female employment rates in the UK continue to lag behind those for men, despite the recent rise in the state pension age for women pushing the figure up slightly. Furthermore the study found that women are increasingly disappearing from executive jobs – women only occupy a quarter of the highest paid top ten per cent of posts.
That there is a dearth of female talent represented at board level in the UK is a truth universally acknowledged. White papers have been drawn up to address this dilemma. In the Davies Report, published in 2011 and penned by Lord Davies of Abersoch, Lord Davies proffers a solution to redress the current gender imbalance of UK boards, calling for strong voluntary action in the shape of FTSE100 companies signing up to the voluntary target of having 25 per cent of their boards comprising women by 2015.
Recommendations such as this are laudable and achievable and I believe are a more organic way of bringing about effective change than using the blunt instrument of legislation to introduce mandatory quotas. However, it is unequivocally true that rapid change is essential.
The issue of women on boards is part of a wider debate about encouraging diversity in the workplace. This matter is more essential and greater than the need to increase the number of female CEOs and board-level executives, although this is important it leaves itself open to accusations of “tokenism”. Diversity is about effecting a cultural change in organisations and industries, transforming businesses from close-minded institutions to those that embrace diversity in all formats. The reasons for bringing about change are manifold but are more complicated than mere sexual politics and political correctness.
A recent piece of research found that companies whose boards were made up of at least a third by women are 42 per cent more profitable. Diversity in the work place is not only a healthy, laudable corporate ideal to embrace, it is also profitable. The 30 Percent Club, founded by Newton Investment Management’s CEO Helena Morrissey, has a strapline under its tree logo that I think is particularly important: “Growth through diversity”. It is this message – growth through diversity – that is so important. Simply put, companies are more likely to thrive with a diverse workforce.
It is my sincere belief that diversity should form the backbone of a well-rounded and robust business plan. This business tenet stems from a desire to create a culture whereby the best and brightest talent can lead regardless of gender, religion, race or sexual orientation. It is this objective, this vision, that has been the principal driver of the last 35 years of my life as a business-building lawyer.
Diversity is a source of competitive advantage; a better business is a more diverse business. Assembling diverse teams enables more innovation, greater customer awareness, and generates better results. People, cultures and states are not homogeneous, they are heterogeneous – this is particularly true in today’s global society. Consequently businesses should strive to be as diverse as the countries and regions they operate in. Creating this workplace balance is part of building a successful firm, but actions, not just words, are required to bring this about. Those businesses that do not encourage diversity should start doing so now, or else face quotas or, even more likely, falling revenues as more dynamic, diverse competitors steal a march.