The corporate diversity conversation has evolved rapidly from where it started, as an initiative to get more female representation in the boardroom. Achieving gender parity at all levels of the company on vectors from pay to representation remains a critical aim. However, we’ve come to define diversity far more broadly, across ethnicity, race, sexual orientation, gender identity as well as neurodiversity. And we are seeing an ever-expanding range of benefits, from boosting financial performance, attracting new talent and opening our minds to new ways of doing things. Below is our latest thinking on the diverse advantages of diversity.
Diverse comes first
We all think using heuristics – mental shortcuts which help us boil down data and draw conclusions in an increasingly complex world. ‘Confirmation bias’ is one such schema which affects the way we process new information, where we look for evidence to confirm what we already think we know. In a workplace context, confirmation bias and its near relation, ‘groupthink’, become prevalent when people hire in their own image, leading to teams of people who approach challenges in the same way. After the financial crisis of 2008, the UK government commissioned David Walker, the former chairman of Morgan Stanley, to recommend measures to improve the corporate governance of UK banks, particularly with regard to risk management. Among his wide-ranging conclusions was the idea that top-tier management and boards were not challenging their own preconceptions widely enough, which led to risk-taking behaviour and a crash few saw coming.
However, representation from different social groups at all levels of companies can alleviate these issues. Studies by McKinsey have shown that increasing diversity at the executive level increases the economic performance of companies.
Diversity has pulling power
More and more, investors and pension-scheme members are demanding that their companies and service providers reflect their own increasingly varied make-up. A respondent in a recent LGIM survey was adamant on the need for gender parity on boards:
Male, Millennial (ESG member study, LGIM)
However, it’s not just about appeasing today’s members, but attracting a younger generation to your organisation. Generation Z (born 1997– 2012) now comprises about 30% of the world’s population. They want to work for, and support, businesses that reflect their diversity and inclusiveness, and companies are going to need to meet this generation’s expectations to attract their talent and purchasing power.
Expanding neural networks
As I mentioned earlier, a key facet of the ways the diversity conversation has expanded is in how it encompasses broader definitions of diversity itself. This includes embracing different ways of thinking and working, such as thinking about how neurodiverse people can bring their unique skills, as well as the challenges they face, to the table. Employers who raise the bar in making the workplace more inclusive for people with autism, ADHD or dyslexia, for example, may also reap the benefits of consulting minds with a novel approach to a problem.
The social problems arising from excessive reliance upon the internet and social media, including loneliness, cyber-bullying, screen addiction and polarised political debate have been well documented and extensively discussed over the past decade.
As we have moved through the pandemic, these issues have been writ large, causing governments, pressure groups and charities to raise the alarm about mental health issues and addiction. Providers and employers should use the fact that many people have struggled during this period as a welcome jumping-off point to create a better understanding of how to make workplaces – and society at large – more inclusive for people who struggle with exclusion every day.