Keynote Lecture: Leadership & Diversity
16 May 2016
The latest lecture in Henley’s Engaging Business series featured Dame Alison Carnwath whose CV includes directorships at Man Group, Gallaher, Friends Provident, Barclays, National Power and J Henry Schroder Wagg & Co Ltd, a subsidiary of Schroders plc. As well as her role as a Non-executive Chairman at Land Securities and a number of not-for-profit roles, she is also currently Chair of the Audit Committee of BASF and an independent director at Zurich Insurance Group.
Introduced by Professor John Board, Dean of Henley Business School, Dame Alison recounted how she had ‘grappled with diversity’ for some time and had concluded that diversity, in itself, was no guarantee of improved business performance.
Nor, she suggested, is there a blueprint for developing a more diverse mix within an organisation, although she insists that it is something that has to be championed, saying that she would ‘personally find it much more rewarding to work in a diverse workplace.’
Diversity in everything
Dame Alison expounded on her feelings that the issue of diversity is one faced not only in the boardroom or workplace, but in every aspect of a democratic society, and that in the UK, ‘we do relatively well. Thoughtfulness and leadership will be key to driving successful outcomes,’ she continued, ‘and the UK is well positioned to play a leading role.’
She went on to assess the qualities needed for a successful leader in today’s complex business environment, and reflected back on a generation past, in which dominance, determination, drive, focus and control provided the ingredients for a respected leader. But the role has changed, and now, an ability to communicate a clear vision to a diverse audience is paramount, along with a high level of emotional intelligence.
Noting that ‘Corporate Britain has made good progress recently’, Dame Alison sounded several notes of caution.
‘Yes, one in four board members is now a woman, and this does make a real difference to the debate, but scratch beneath the surface and there is less cause for celebration, because the real numbers of women in board positions is considerably lower than it might appear, with many women occupying multiple roles. And our social and ethnic diversity is even less well developed.’
Dame Alison went on to comment on the importance of this social diversity – along with cognitive diversity – and how the inclusion of different mindsets has become an effective antidote to unconscious bias. And while conceding that gender and ethnicity are good starting points for creating diversity, they don’t necessarily impact on the critical issue, which is diversity of thought.
The performance issue and attracting talent
Dame Alison cited a recent research study carried out by McKinsey, covering 400 companies in a number of countries. While there was a slight but detectable increased performance in those organisations considered the most diverse – and an equally small decrease in those considered less diverse – it was notable that the more diverse organisations found it much easier to attract talent, and were able to engage with their employees more effectively.
‘There are, of course, risks and challenges to creating a more diverse culture,’ Dame Alison cautioned. ‘There will be more conflict, and potentially a loss of those employees who feel most threatened, but progress requires people who challenge us, and make us feel uncomfortable,’ she said.
Along with gender, Dame Alison urged us to create a better social mix, one that is more inclusive of people from less privileged backgrounds. But again she emphasised that there is no benefit in recruiting people from less privileged backgrounds if they have the same mindset as those already within the organisation, thus ticking a box but perpetuating the unconscious bias.
‘And just as important, we have to create a workplace environment in which people of diverse backgrounds feel at ease, or else we risk losing them before long. We need a framework that attracts them, and then encourages them to be themselves, not just conform to our norms.
‘Quite naturally, recruits from diverse backgrounds are likely to feel self-conscious, and possibly reluctant or unable to fully express themselves.’
And having just one member of a group is only likely to reinforce this feeling of isolation and tokenism, she suggested, with a recommendation that in order to be effective, a minimum of three women should ideally sit on a board. Only then will the culture change.
Positive action is needed
Dame Alison warned that there is a presumption that the diversity that exists within the general populous will organically filter through to leadership, but this could take generations unless we take proactive and positive action.
Acknowledging that it takes courage to recruit someone from a less traditional background, and that there could well be less tolerance of ‘different’ recruits who fail to perform at the highest level, she reiterated that creating ‘thought diversity’ is, in her view, more important than simply ticking the obvious boxes.
So what can be done, in practical terms?
Dame Alison suggested a number of actions that might help to accelerate the process of creating a more diverse leadership, namely:
- Identify areas of unconscious bias
- Ensure that there is total commitment from the top, and that it is not simply viewed as a CSR project; perhaps sponsorship of new recruits by the CEO
- Create an environment in which recruiters and recruits are not in fear of failure
- Have an appropriate and diverse working environment, so that if the main office is open-plan, there are other, thinking spaces
And she suggested that we should also consider the following questions:
- What is our notion of talent?
- Is our recruitment transparent?
- Does our leadership reflect the make-up of the workforce?
- What are the views of shareholders?
In closing, Dame Alison applauded a number of major organisations for successful diversity initiatives, including: Coca-Cola, which insists on 38% of all new recruits being ‘of colour’; Clifford Chance and others that don’t physically see their candidates; PwC, which supports late developers by not taking A-level results into account; and McKinsey, which actively encourages LGBT recruitment.
‘Creating a more diverse business environment is something for which we are all responsible,’ she concluded, ‘so challenge less diverse organisations, and help make it happen.’
Following the presentation, Sir David Bell, Vice Chancellor of the University of Reading, facilitated a brief Q&A session, during which Dame Alison covered the following topics:
- The need for age diversity to add to the scope of the debate
- In the absence of a single blueprint, the need for the senior leaders within each organisation to define its own requirements for diversity, and appoint champions
- The importance of allowing flexible working, developing new working environments, and to retain talent by understanding and respecting people’s individual lifestyles and choices
- Her preference for guidelines over quotas
- The importance of advisory boards
- The importance of diversity in SMEs, and the different challenges they face
- The reality that in organisations where recruitment is infrequent or sporadic, the rate of change is inevitably slower
- The role of shareholders, and her disappointment that she has never heard of shareholders demanding more diversity rather than focusing solely on the bottom line
Following the event, delegates were asked – under Chatham House rules – for their views. The following represents a cross-section of responses:
‘I really enjoyed it, and it was great to see such a good mix of people here.’
‘Personally, I think it’s a bit disappointing that we’re still having this debate. However, I thought her “thought diversity” angle was particularly interesting.’
‘For me, the biggest take-out from the talk was the role that shareholders could take. That was a real lightbulb moment for me.’
‘It’s easy to forget how advanced the UK is in this area. Where I’m from, and in lots of the neighbouring countries in Central and Eastern Europe, this isn’t even a topic our business leaders would think about.’
‘It was extremely interesting, and she’s a very authoritative speaker, but that’s nothing more than I’ve come to expect of Henley events!’