January 2020 • Topic: Driving diversity • by Yasmine Chinwala
This thought paper series introduces why we believe radical action is necessary to drive a step change in diversity to reach a new equilibrium, and proposes actions that together will deliver improvement steadily and sustainably.
New Financial is a social enterprise that relies on the industry to support its work. Our research is free to our member firms. To request a copy of the thought papers in this series please click here.
As HM Treasury’s official data partner for assessing the progress of signatories to the Women in Finance Charter, New Financial has unparalleled insight into how financial services companies are approaching the challenge of increasing female representation at senior levels. We have also analysed gender pay gap reporting for the sector and gathered feedback from our broad network across the industry.
While we see evidence of a great deal of activity (plenty of which is useful and long overdue), the vast majority of it is tinkering at the edges of legacy systems. We believe such actions will serve to maintain an equilibrium, but not drive the step change to a new equilibrium – not just for women but people from any under-represented group – and certainly not in an acceptable timeframe.
Some (arguably all the largest) companies have had a head of diversity for a decade or even two, yet change has been marginal at best. We often hear from diversity leads: “I’ve pulled every lever I can pull. What more can I do?” This sentiment is echoed by senior executives raising concerns about “diversity fatigue” because there is so much talk and busyness but little to show for it.
So, what then must we do? This is the question we are seeking to pose and answer with our Radical Actions series. We cover:
1. An introduction to the question: what must change?
New Financial’s hypothesis is it’s time to be radical – what has gone before is barely fit for purpose in today’s world, let alone tomorrow’s. The financial services industry must take a new approach if it is to derive the benefits from a diverse, skilled and innovative workforce. This introductory thought paper sets the scene for the need for radical action from an industry perspective and at firm level.
2. Stepping-up the role and expectations of the D&I function
This paper explores the impact that the changing diversity context is having on internal teams that have been charged with overseeing diversity initiatives. Does the changing backdrop and expectations of D&I need a different kind of skillset, reporting line and set of success measures? If so, what would that makeover look like? New Financial examines the evolving role of the D&I function and asks if it is equipped to deliver what is being asked of it by firms.
3. Taking a forensic approach to diversity data
The financial services industry is all about numbers, yet few firms apply even a fraction of the analytic rigour to their people data compared to their product and market data. In this report we look at why and how improving an organisation’s ability to gather, extract, analyse and share data can make a vital difference to recruitment, promotion and retention of female staff and those from diverse backgrounds, based on industry case studies.
4. Updating and expanding the business case
While research correlating increased diversity with performance from McKinsey and Credit Suisse has an important role to play, it is time to update and expand the business case for diversity and inclusion. In this paper we will explore why, how and what we talk about when we frame the business case needs to evolve and expand. We discuss how the business case should adapt to appeal to the different business areas and levels of seniority (such as middle managers) that are increasingly involved in delivering diversity, and how improving diversity data will quantify the impact of D&I.
5. Shifting to evidence-based decision making for people
Companies consist of people and products, yet few firms apply the level of methodical diligence to their people decisions that they do to developing, launching and maintaining their products and services. People decisions – even the most important ones – often boil down to an individual and their gut instinct. In this paper, we advocate a shift towards an increasingly evidence-based process for making people decisions. We discuss the early signs we see from organisations seeking to inject greater rigour, accountability and time into their systems, processes and policies underpinning people-related decisions, in order to improve diversity.
We call this our Radical Actions series, but these ideas are actually not that new. They are an extension of existing ideas that may partly be in place already but are not being executed properly, or without the necessary authority, or inadequate resource. We believe bringing all these threads together will drive diversity to the next level.