March 7, 2024

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by: kiran

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Tags: Diversity & Inclusion

The Board: If DEI comes from the top, the top needs to work

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.

While the FCA’s pressure to improve DEI across the insurance sector is to be applauded, our round-table guests universally had concerns about the ability of Boards to drive the initiative forward.

We all recognise that progress is sometimes slow – after all, diversity only moves at the speed of cultural change. It can’t be forced; it can only be encouraged. But crucial to that encouragement in a commercial organisation is an environment mandated by the Board. In the words of Pauline Miller, Chief Equity Officer at Dentsu International, “A Board isn’t going to be enough to shift an organisation; but the Board’s role is to help hold that organisation to account and to drive the right outcomes for shareholders in the long term.”

But our guests felt that Boards are often ill-equipped to be the drivers of change.

First, we must recognise that Boards are often more “pale, male and stale” than the rest of the organisation. Success typically comes to the most privileged in society, so we can expect a Board to be the most nominally distanced from diversity. Erik Johnson, Founding Board member with Inclusion@Lloyd’s therefore asks, “How informed are members of your Board going to be about diversity? And who’s going to upskill them? Otherwise, we can’t expect them to credibly give oversight.”

David Flint, Founder & CEO, Blue Mountain Capacity suggests that some of that upskilling will come from within. “Those five white men in a room have an agenda item in front of them to address. They typically look down in their organisations to get the information they need to make decisions. So those five people need to invite HR and the other people they rely on into those meetings, to take the first steps towards true diversity. They need to make the commitment to change the business, and the way they will do that is to change the people that report into them.”

But there’s no substitute for Board diversity itself. And Mark Lomas, FCIPD, Head of Culture, Lloyd’s of London sees too many closed doors. “In the US and other sectors in the UK, in particular, to drive effective succession, Board-level talent is pipelined into mentoring programmes where they are invited to sit in on Board meetings”, he says. “Likewise, they will be advised to serve in school governor and third sector trustee roles, because when the Executive Search firms go out to market, the first criterion on the job description is likely to be Board experience. But we’re less creative in the insurance sector. Insurance can prize experience from within over candidates from outside the sector. Boards can be very closed, and where that’s the case they will be populated from an increasingly small pool of candidates.”

If a Board does become skilled, committed and focused enough to drive change, the next step is to execute – and that means more than token efforts. Says Pauline, “In every role, I’ve been the first and only person to drive diversity until we’ve built a team and the budget. But one lonely person trying to drive change in a market or organisation of any size is never going to work. We need Boards to engage with exec teams and execute on their management and oversight responsibilities.”

But that’s enough of the mountain we need to climb – enthused diversity professionals can make the journey easier for themselves by also making life easier for Boards trying to tackle diversity challenges. By talking their language and working their way.

Elsewhere in this series we talk about the dangers of statistics, how they can be misinterpreted and how there are too many weak ways (and no accepted gold standard) for measuring diversity. But numbers are also the favoured tool of Boards. As Erik points out, “If you’re sitting on the Board and there’s nothing flashing red, you’ve got other things flashing red that will eat up your attention. You’re not going to dedicate a Board session to a diversity topic when other things on your dashboard are drawing your attention.” Data may be hard to obtain and hard to attach credibility to, but it is essential that diversity professionals find reliable information and draw a strong strategic argument from it.

Then, it’s crucial to get diversity onto the management agenda – ideally in a forward-looking rather than “crisis management” fashion. When data presents the leadership team with some good news, or at least a verifiable strategy, it’s much easier to get diversity issues discussed! Says Heather Connery, Founder & Managing Director, ANTHRORG Ltd, “I did this with a leadership team who really wanted to move the dial. So, we brought in the dashboard and tracked 12 different data points every quarter. But most importantly, we had four awaydays each year, and one of them was specifically devoted to people and culture, timed around pay reviews. So, by tying it into the corporate calendar and giving people data that they can see heading in the right direction, you get some success.”

Key takeaway: The road to more diverse Boards is long, and Boards can only be the first line of an organisation’s diversity ambitions. But you can make a dent in Board perceptions by working in Board-friendly ways.