Public Disclosure: Turning DEI into PR

This is one of a series of reports from Padda’s DEI round-table discussion with a panel of renowned insurance-sector DEI experts in January 2024. You can read biographies of our experts and find the other reports here.

Section 5-29 of the FCA’s consultation document on diversity and inclusion (CP23-20) contains an interesting suggestion: “We propose that firms publicly disclose their targets and their progress towards them annually. This disclosure would promote transparency and allow firms and other interested stakeholders to benchmark progress.”

In the spirit of “sunlight is the best disinfectant”, disclosure and transparency are instinctively a good thing, but our guests were keen to point out that (as always) the devil will be in the detail. Says Heather Connery, Founder & Managing Director, ANTHRORG Ltd, “I take a pragmatic view here. Firstly, let’s recognise that what gets measured gets done. This is driving positive change, not because leaders necessarily want that positive change, but because they’re being held to account for it. Having your data put in front of peers and the public is beneficial because it will encourage honesty and allow benchmarking across the sector.”

But every piece of regulation also incentivises approaches with counterproductive consequences. Heather continues, “It will also encourage a sort of competitiveness. I come from a legal background, and we used to call RFP’s ‘beauty parades’, where everyone would maximise their experience, charity work credentials and so on in order to look more appealing. So, I think that transparency will enable us to hold companies to account, it will expose where the gaps are, and I hope also broaden the conversation on diversity in retention and attraction to both clients and staff. But we need to recognise that firms will use this compliance as a new front in their PR.”

Sandra Lewin, podcaster and Founder at 100 Women in Insurance adds that the data which will be declared will often be imperfect. We’re all used to the complexities of gathering corporate data, but in the case of diversity data, the people who most need it are the people least likely to want to declare it. She says, “A lot of people don’t actually want to contribute to data. They don’t want to tick certain boxes – for a range of reasons.”

You might think that this is primarily through concerns about having personal information divulged to the business, but Sandra says the main reason for silence on diversity metrics is “people don’t know what you’re doing with that data. As much as sharing data is good, it can be used in many ways. It can be misunderstood and it can be manipulated to tell whatever story you want to tell.”

“I think we should maybe start thinking about educating communities more as to why this data is important and being very open about what we are going to do with it. If we can have the same transparency over use cases as the FCA would like us to have with the key data itself, then I feel we’ll get more correct and accurate data, and more contribution to surveys because employees can see the purpose behind it.”

And then there’s the question of what is actually being measured and declared. Mark Lomas, FCIPD, Head of Culture at Lloyd’s of London, says, “In my experience, to yield any reasonable sense of inclusion from sentiment, the engagement survey must be split by demographic components (e.g. colour, gender, neurodiversity etc. which must be clearly defined and explicitly asked in the survey) so that you can see exactly what the variants are. My personal preference is to measure inclusion by conducting equality analysis on each part of the employee lifecycle to determine if outcomes are proportionate.”

“And finally”, Mark continues, “we need to recognise that the disclosure rules – as they stand – only apply to firms with 250 employees and above.”

Key takeaway: As with all reporting, the genuinely good intentions of transparency can be overshadowed by PR, misinterpretation and the weaponisation of diversity for competitiveness. DEI professionals must be wary and campaign for clarity and truth.