23 Mar 2022

Culture challenge: follow the leader

Leaders set an example for others to follow, have a critical influence on culture, and hold sway over key decisions. In this research, for example, just over three-quarters (77%) of respondents say their leadership or CEO set their DEI objective. Therefore, it matters who those leaders are and whether they reflect the culture an organisation wants to emulate. Yet the biggest challenge in our survey, affecting over eight out of 10 (81%) respondents, is a lack of diverse leadership in their organisations.

If employees cannot see leaders who look like them, or reflect their life experiences, then it is unlikely that those employees will believe they have the right to aspire to leadership themselves. The UK government has put in place two key reviews in recent years to increase the number of both women in leadership positions and ethnic minority directors on boards at FTSE 100 and FTSE 250 companies.

The Parker Review found that by March 2021 the number of FSTE 100 firms with at least one director from an ethnic minority background had risen to 81, from 52 in January 2020 – with a target to reach 100 by the end of 2021 (FTSE 250 firms have until 2024 to meet this objective).

The government has also published its Inclusive Britain: government response to the Commission on Race and Ethnic Disparities policy paper. Although it stops short of mandating ethnicity pay gap reporting, it will publish guidance to employers on voluntary reporting this summer. It will include tools to help employers understand and tackle pay gaps within their organisations and build trust with employees. Those that do publish their ethnicity pay gap will also be asked to publish a diagnosis and action plan for change.

The Hampton-Alexander Review noted in its February 2021 report that 30.6% of people in FTSE 100 leadership roles were women, while 28.5% of those in FTSE 250 leadership roles were women.

More recently, the FTSE Women Leaders Review found 414 women held company board roles at FTSE 100 firms last year, up from 374 in 2020. However, it also exposed a lack of women in executive director roles. Just 13.5% of the executive director positions were held by women in 2021, down from 14.2% the year before.

Reviews such as these help to move the dial and set good examples. Our respondents appear to reflect this, with over half (57%) having targets to increase gender representation at leadership level, and a third (33%) doing the same across BAME groups.

It is the groundwork put in place years before that allows talent across diverse employee groups to thrive, be it via DEI networks that both support groups of employees and inform leadership about what needs to change, or mentoring programmes targeted at increasing the career prospects of people of all diversities.

This article is taken from REBA’s DEI Benefits Research 2022.