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Do you consider your board to be diverse in terms of their socio-economic backgrounds?

01 October 2019

Our community looks at social diversity

Our community looks at social diversity

Inspired by a report from the Equality Group which found that 21% of Londoners thought their class and background had been a professional disadvantage, and 26% had changed the way they speak to be more like the “Queen’s English” we decided to see what The Chartered Governance Institute and Core communities think about socio-economic diversity within their organisations.
When asked about whether they considered their board to be diverse over two-thirds (67%) said that theirs was not. One responder stated that “Board members are all socio groups A and B mainly A. So many directors be they female, gay, ethnic or male have all been to the same unis, business schools, and sometimes the same companies. Boards in the main fear having an employee in the Board or even a Committee”. Whilst another claimed that theirs had a “typical composition of ‘pale-male-stale”.

Which of the following does your company do – if any – when hiring?


Some questioned how easy it is to quantify stating that “It depends on what you mean by ‘diverse’. We have a mix of privately and state educated board members. However all are degree educated with most in STEM subjects. All come from middle class to upper middle class backgrounds. All are now in top socio economic group” and another “I believe this is a really tricky challenge for the Board - as an example - when is that socio-economic background measured? On appointment or in formative years? I presume the latter. But even then, how does one view someone from an underprivileged background, state school but achieved academically and went to Oxbridge and has for thirty years been a high achiever?”

Our responders all felt that increased diversity was a good thing, highlighting that diverse boards brings “a diverse workforce brings diverse thinking and leads to diverse solutions to challenges” and “[an] ability to better identify with range of service users and provide a range of ideas and approaches to improve the service that we provide”. However, most stated that they did their best to attract diverse applicants when recruiting with one responder saying that “we advertise impartially so that anybody who suits the criteria for the position regardless of their background can apply”.

When asked specifically about educational backgrounds only 34% thought that their boards were diverse enough with one claiming: “In the financial services industry, the regulators are looking for individuals that possess a specific skill set, and this in practice limits potential candidates from a broader pool. As a wider question, it would be interesting to get a view from investors on whether they would be prepared to support directors that are from a different background“ and another worryingly stating: “Most boards are drawn from the same small social and educational background. Diverse in colour, sexuality, gender yes, but let someone in from outside the top socio economic groups – hell no. Modern boards are consciously resistant to someone from outside being considered. Boards think they have a robust process free from bias but to whittle down to a NED they will pick one from their own society even in today’s environment. And sadly female directors have the same attitude! That’s life!

Conducted in association with The Core Partnership

If you are a company secretary or governance professional at a leading UK business, and you would like to take part in or comment on future surveys, email team@core-partnership.co.uk

 

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