DELIVERING DIVERSITY - Race and ethnicity in the management pipeline - CMI
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DELIVERING
DIVERSITY.
Race and ethnicity in the
management pipeline.
Prof Nic Beech, Prof Nelarine Cornelius, Dr Lisi Gordon, Prof Geraldine Healy,
Prof Emmanuel Ogbonna, Dr Gurchathen Sanghera, Chidozie Umeh,
Dr James Wallace, Patrick Woodman
July 2017
ACKNOWLEDGEMENTS
This research was carried out by the The Research Advisory Board Prof Nic Beech, Chair of BAM,
Chartered Management Institute (CMI) Vice-Principal (Academic Planning and
Secondly, we would like to thank
and British Academy of Management Performance), University of Dundee
the Research Advisory Board whose
(BAM). We have been greatly helped by
ideas, challenge and guidance were Prof Nelarine Cornelius, BAM Council
a number of people who gave their time
instrumental to the project, under the (Research and Publications), School
generously.
expert leadership of Pavita Cooper. of Business and Management, Queen
First, we would like to thank all those Mary University of London
Pavita Cooper CCMI, Chair of the
who gave their time to complete
Research Advisory Board, Founder Prof Udy Archibong, M.B.E., Director
the questionnaire, shared ideas in
of More Difference for the Centre for Inclusion and
discussion with us, gave us their time
Diversity, University of Bradford
for interviews and took part in the Béatrice Butsana-Sita, Managing
case studies. We were struck by the Director, Capita Networking Solutions Dr Lisi Gordon, School of Management,
enthusiasm of so many participants and University of St Andrews
Mary FitzPatrick, Diversity & Inclusion
their willingness to share insights and
Leader, GE Renewables Prof Geraldine Healy, School of
ideas to drive change on this agenda.
Business and Management, Queen
We look forward to continuing to work Parminder Kohli, General Manager
Mary University of London
with you to deliver diversity across UK Business Development, Marketing
businesses. In particular, we’re grateful & Operations, Shell Prof Emmanuel Ogbonna,
to those who contributed to the case Cardiff University Business School
Anna Saunderson, formerly Head of
studies: Talent, Jupiter Fund Management plc Dr Gurchathen Sanghera,
• Jan Gooding, Global Inclusion School of International Relations,
Jay Sheth, Head of Economics,
Director, Aviva University of St Andrews
Policy and Public Affairs, Virgin Money
• Simon Rodgers, Head of Diversity Chidozie Umeh, School of Business
Rachel Short, Director, Why Women
and Inclusion, Aviva and Management, Queen Mary
Work
University of London
• Chuck Stephens, Head of Diversity Chuck Stephens, Head of Diversity
and Inclusion, EMEA, Google Dr James Wallace, School of
and Inclusion in EMEA, Google
Management, University of Bradford
• Colin Clements, EA to Fiona Cannon, Prosper Williams, Assistant Vice
Group Director Responsible Business President – Digital Adoption and
and Inclusion, Lloyds Banking Group Engagement, Barclays The contribution of the CMI team is also
• Marjorie Strachan, Head of Inclusion, recognised:
Petra Wilton, Director of Strategy,
RBS CMI Patrick Woodman, Head of Research
• Hannah Munro, Diversity, Inclusion and Advocacy
and Early Careers Manager, Sainsbury’s Ipek Noel, Research Manager
The research team
• Rafael Campos Valdez, HR Business Dr Wahida Amin, Research Manager
Partner – Diversity and Inclusion, The research was led by the British
Schroders Academy of Management with a team Lysbeth Plas, YPL Research and
from across several universities, led formerly CMI’s Research Manager
• Dan Perrett, Head of HR Business by Prof. Nic Beech and Prof. Nelarine
Partnering, Virgin Money Cornelius. CMI and BAM would like to
• Matt Elliot, People Director, Virgin thank the entire team for their crucial
Money contributions.
CONTENTS
Acknowledgements....................................................................................................................2
Forewords....................................................................................................................................4
Pavita Cooper, Chair of the Research Advisory Board
Ann Francke CMI CEO and Prof Sir Cary Cooper CBE, BAM President
1. Executive summary....................................................................................................................6
2. Recommendations: how to improve BAME diversity in the workplace................................8
3. Purpose and approach.............................................................................................................11
4. The big picture – literature review..........................................................................................12
Case study: Virgin Money.......................................................................................................15
5. FTSE 100 practices: what HR and D&I leaders are saying..................................................16
Case study: Schroders...........................................................................................................19
Case study: Sainsbury's.........................................................................................................21
Case study: Lloyds Banking Group.......................................................................................24
Case study: RBS......................................................................................................................27
6. Understanding the lived experience of BAME managers.....................................................28
Case study: Google.................................................................................................................30
7. The public face of the FTSE 100..............................................................................................33
Case study: Aviva....................................................................................................................34
8. A developmental approach to changing practice.................................................................36
9. Further resources.....................................................................................................................39
10. Appendix: research methodology...........................................................................................40
11. References and further reading..............................................................................................42
3
FOREWORDS
PAVITA COOPER
Pavita Cooper CCMI
Chair of the Delivering Diversity
Research Advisory Board,
Founder, More Difference
We’ve made significant progress with We have to go deeper into companies working with CMI and BAM, and I’m
workplace diversity in recent years. to understand why so few BAME grateful to my Board colleagues for
Managers have heard and understood managers reach the top, and how their brilliant input and support.
the business case: when you have we can create a more diverse
ever-more diverse customers, you management pipeline at every level Moving forward, I’m delighted to be
need diverse management and of business. supporting the next phase of this work,
leadership to thrive. as Chair of a new initiative, CMI Race.
This research does just that. By talking Our research made clear the need for a
Action to achieve diversity has been to diversity leaders and to BAME new focus on changing how managers
most visible on gender but when managers themselves, it provides a engage with difference and diversity
it comes to race and ethnicity, real rounded picture of the challenges. at every level of organisations. I look
progress has been much less tangible. forward to working with managers
It’s resoundingly clear that we have to from all sectors, of every background,
The recent McGregor-Smith and reboot the conversation about race and other partners in developing plans
Parker reviews have outlined the and ethnicity. Business leaders need to for CMI Race ahead of its full launch.
scale of the challenge. Only 6% of top set the tone and work with managers
management jobs are held by Black, throughout the line to reshape Business as usual won’t cut it. The
Asian and minority ethnic (BAME) business cultures. While this research world is changing rapidly and leaders
leaders, which just isn’t good enough focused on FTSE 100 companies, its that don't respond will struggle to
when BAME groups make up 12% of findings are not relevant only to those attract and retain the best talent in
the working population. Parker called businesses, important as they are to the future.
for at least one “leader of colour” on the health of UK plc. Its insights and
FTSE 100 boards by 2021. About recommendations for action point It’s time to deliver on diversity.
time too: many boardrooms remain the way forward for managers in any
diversity-free zones. organisation.
But just as with gender, we won’t It’s been my privilege to chair an
make the progress that’s needed if excellent employer-led Research
we only talk about the boardroom. Advisory Board throughout this work,
4
ANN FRANCKE AND CARY COOPER
Ann Francke MBA CMgr CCMI FIC Prof. Sir Cary Cooper CBE
Chief Executive, CMI President, British Academy of Management
For business, diversity is about talent, productivity gap between the UK and highest standards of rigour, combined
and how employers can attract, retain our competitors. As the professional with practical relevance and a focus on
and make the most of people’s abilities. body for management and leadership, making a change in business and in
Without doing a good job of growing and the learned society leading on society more broadly.
talent, no business can prosper. research and higher education for
management and business, CMI and We’re also grateful to Pavita Cooper
Discussions about talent have been BAM both have important roles to play. and the Research Advisory Board for
given added urgency in the UK their immensely valuable contribution.
by the Brexit vote in 2016. While The Brexit vote added impetus to our They provided invaluable support
uncertainty persists about the partnership. Our shared commitment throughout the project.
outcome of negotiations with the EU, to diversity at the heart of management
employers in all sectors have to face and leadership made it a perfect We would also like to thank all the
up to the prospect of reduced access combination and the research has leaders who engaged with the
to overseas talent. That makes it been delivered in a superb spirit of research, whether through roundtable
imperative that we think about how we collaboration and joint working. We are discussions, through our survey,
can do better at making the most of grateful to our teams and colleagues or through the personal and case
everyone’s abilities. for their respective contributions and study interviews. Their insights are
hard work over many months. The at the heart of this report and its
In particular, that means refocusing BAM research team drew together recommendations for action.
on how we develop world-class world-class scholars from a range of
management and leadership skills, universities to develop an innovative Delivering diversity demands action
which are so fundamental to business methodology and work with a unique for individual managers and from
productivity and performance – and set of companies and diversity leaders. employers alike, across every sector.
which, the evidence shows, is one This style of working is exemplary We look forward to continuing to work
the of the biggest factors in the in producing research that has the together to achieve that change.
51. EXECUTIVE SUMMARY
THE DIVERSITY OPPORTUNITY Global changes demand diversity too. Despite that, not a single one of the
FTSE 100 businesses already generate diversity leaders we interviewed gave
Black, Asian and minority ethnic
75% of their income from outside the their company’s current performance
(BAME) people are under-
UK,2 and emerging markets are growing on BAME diversity top marks, a ‘very
represented in business and
rapidly. More than ever, businesses good’ rating. Only 54% said that senior
especially in management roles.
need diversity of backgrounds, life business leaders are championing
experiences and viewpoints at every BAME diversity.
It’s time for change.
level of management.
That has to change. We need action
Drivers of change
The economic benefits are clear. Full now, to deliver diversity at every level of
Around 12.5% of the UK population are
representation of BAME individuals the management pipeline.
BAME – yet they hold just 6% of top
across the labour market would be
management positions. Closing this
worth £24bn a year to the UK economy.
representation gap is an urgent
challenge. The UK’s BAME population
The biggest business driver for
is set to grow to 20% by 2030 and
diversity is improving performance, as
busineses are missing out on the talent
75% of HR/diversity leaders told us.
they need.
FULL BAME
Only 54%
REPRESENTATION ONLY
6%
WOULD BE WORTH
OF SENIOR FTSE 100
LEADERS CHAMPION
BAME DIVERSITY
£24 billion
A YEAR OF MANAGERS IN
THE UK ARE BAME
1
McGregor-Smith Review 2017 2
Parker Review 2016 3
BEIS 2017
6KEY FINDINGS
1. LET’S TALK ABOUT RACE
We need to end what one FTSE 100 leader described to us as “the silence around race and
ethnicity.” Many managers are uncomfortable discussing it and wary of causing offence. Only 54%
of HR/diversity managers see their business leaders championing BAME diversity. Leaders need to
find their voice and show their commitment to diversity and to building inclusive business cultures.
2. LEARN FROM THE GENDER AGENDA
Employers can transfer lessons from the progress made on gender diversity, among them the
power of transparency to drive change. For now, BAME lags far behind. Only 21% of companies
surveyed report publicly on BAME, compared to 71% on gender diversity. 42% even told us that the
prioritisation of gender has become a barrier to progress on BAME: it has to be ‘and’, not ‘or’.
3. FACE THE NUMBERS
83% of the HR/diversity leaders surveyed say they need better data to drive progress on race and
ethnicity. Many report employee reluctance to share personal information, but data from across the
employment cycle is vital to driving business improvements. Most powerfully, publicly setting and
reporting on key diversity indicators is a major lever of accountability and change.
4. IT AIN’T WHAT YOU KNOW – IT’S WHO KNOWS YOU
Many BAME managers say their careers were significantly influenced by a senior executive who
took a special interest. Managers at all levels need to make sure they support diversity through the
emerging leaders they sponsor.
5. WANTED: ROLE MODELS AND MENTORS AT EVERY LEVEL
Role models show the company welcomes diversity. ‘Next up’ role models – drawn from all levels of a
business, not just those at the very top – inspire confidence and ambition from those who follow them,
showing that career progression is possible. Mentoring also needs to be encouraged at all levels; peer
mentoring, mentoring circles and reverse mentoring offer powerful benefits.
6. FITTING IN?
Many BAME managers question the perceived ‘fit’ for BAME employees in their businesses, pointing
to norms that favour what one interviewee called “white middle class men from elite schools and
universities.” Some stressed the responsibility of BAME employees themselves to understand and
navigate these differences. Internally, companies need to bridge this gap, tackling outdated cultures.
Externally, they need to show a more diverse ‘public face’ in company websites and annual reports.
7. EVIDENCE BASED DEVELOPMENT
Companies should accelerate their progress by gathering evidence from outside the business,
like good practice case studies and benchmarking data. This data can be used to identify
opportunities for improvement and ways to develop key decision makers throughout the
business – including, critically, line managers.
7ACTION FOR LEADERS: IN SUMMARY
1. BREAK THE SILENCE
• Re-boot the conversation. Show commitment, make the business case and build employee
buy-in to deliver diversity
• Support BAME networks to voice BAME employees’ views
• Build line managers’ capacity to deliver diversity. Make it OK to be curious and ask questions
2. CHANGE THE STORY
• Generate momentum: make BAME your focus and define a plan for change
• Use the power of transparency. Publish your strategies, your targets and your progress
• Show inclusive leadership and call out bias
3. MEASURE IT, MANAGE IT, REPORT IT
• Measure BAME diversity throughout the talent pipeline, including representation at
management levels
• Build employee trust and confidence for the use of personal data on ethnicity
• Establish pipeline indicators and use time-trend data to manage progress
4. TAP INTO THE POWER OF SPONSORSHIP
• Create more opportunities for senior leaders to meet emerging BAME leaders and build diverse
networks.
• Actively seek out diverse emerging leaders to sponsors and advocate for within the
organisation
5. BUILD DIVERSITY THROUGH ‘NEXT UP’ LEADERSHIP
• Identify and use ‘next up’ mentors and role models, not just remote senior leaders. Make
mentoring the norm
• Use mentoring circles and reverse mentoring
• Share stories of diverse employees and showcase cultural differences
6. BE INCLUSIVE AND ADAPTIVE
• Make clear that the company values difference and diversity so no minority employee is left
questioning their perceived ‘fit’ in the company
• Build adaptive cultures that respond to the differences people bring to work, rather than just
asking others to fit in
• Prove to the external world that your organisation is diverse, remembering that your online
presence is your public face
7. BENCHMARK AND COLLABORATE
• Benchmark with others in your sector
• Collaborate and share good practice to accelerate change
• Build diversity training into management and leadership development and make it a
requirement for career progression
82. RECOMMENDATIONS: HOW TO IMPROVE
BAME DIVERSITY IN THE WORKPLACE
SENIOR LEADERS 6. Seek out talented BAME employees 6. Engage with employees on why
1. ‘Break the silence’ and speak up to sponsor and mentor. Get your it is vital to disclose background
with strong leadership on BAME senior managers and direct reports information to HR. Explain why data
diversity. Communicate a clear to do the same. is so important to driving change
business case and build employee and earn trust in how it is used.
buy-in to organisational change. 7. Implement the ‘pathway to
Senior leaders must show inclusive development’ for BAME diversity LINE MANAGERS
leadership by calling out any bias in described in Chapter 8 below. 1.Celebrate cultural diversity in your
their organisation, and encouraging team. Be curious and ask questions
all managers to do likewise. HR/D&I LEADERS about cultural differences.
1. Measure and monitor diversity in
2. T
alk publicly and use all the HR processes and set targets for 2. Don’t be afraid to ask for help on
company’s communications progress, from recruitment right how to break the silence on race
channels to make clear the through the talent cycle. and ethnicity. Take the lead with
organisation’s commitment to your professional development
diversity. Can your people articulate 2. Make diversity real by using case and seek out training, for instance,
the company’s diversity culture when studies and stories to engage in unconscious bias or inclusive
talking to clients? colleagues across the company, leadership.
BAME and non-BAME alike.
3. C
ommit to collecting better data Celebrate cultural events to promote 3. Focus on developing others. Act as
to enable change. Set aspirational a culture of inclusivity. a next-level role model for inclusive
targets to measure the company’s leadership and support others’
progress. Be accountable for the 3. Develop managers’ capability development through mentoring.
results. And listen to staff views on to talk about race. Integrate
how to achieve change and tackle diversity training into management 4. Signal your availability to talk about
barriers to progress. development, at senior levels and difference, and make it possible
throughout the pipeline, to give for all employees to do the same.
4. B
enchmark across your competition managers the confidence to talk Actively call out biased behavior
and collaborate to share good about race and diversity. with a focus on learning and
practice and accelerate change. development, and encourage your
Make diversity a company KPI. 4. Ensure all high potential BAME team to do so.
employees are actively mentored or
5. M
ake every manager and sponsored to support progression.
leader accountable and identify
champions across senior and 5. Work towards measuring and
middle management levels so it has addressing any BAME pay gap,
ownership beyond the CEO. Embed building on the gender pay gap rules
diversity as a factor in business already in place for large business.
decisions.
9BAME COMMUNITIES POLICY-MAKERS
1. Help break the silence, including 1. Encourage transparency through
colleagues who fear making reporting on the BAME pay and
mistakes to discuss difference. progression gap. Work closely with
Engage with business initiatives to the management community to
support and discuss diversity. Share shape policy, champion industry
your background information with leaders, and share emerging good
HR when they collect ethnicity data practice on this complex challenge.
and encourage others to do the
same. 2. Champion progressive employers
and encourage others. Work with
2. Put yourself forward. Differences business to develop aspirational
in organisational norms and targets for BAME representation in
expectations can prevent BAME all levels of management, not just the
employees from asking for support boardroom, and for action on pay.
or guidance. Ask for more, from line
managers, mentors and sponsors, 3. Address inequalities in educational
and from the business. access and attainment for BAME
students. Businesses’ ability to
3. Seek formal opportunities to develop shape the management pipeline is
new skills. Network with, and learn influenced by the intake: government
from, peers. can help ensure a focus on growing
employability skills among all
4. Challenge outdated cultural norms in students, including BAME groups,
your company. Nobody has to accept and should look, in particular, at the
a company’s culture just the way they skills needed by growth sectors.
find it. Talk about differences and
question the status quo.
103. PURPOSE AND APPROACH
This research aimed to: • analysis of the public face, policies or Asian people are in the majority. It
and performance of all FTSE 100 could also be interpreted as implying
• understand the presence and
companies through a web-based that BAME people are a homogeneous
representation of Black, Asian
evaluation group, which is clearly not the case.
and minority ethnic (BAME)
We have written in this report of BAME
managers and leaders in FTSE 100 • an online survey of 24 HR or
groups or communities in the plural:
companies Diversity and Inclusion (D&I)
businesses also need to avoid thinking
leads, to build a picture of
• analyse problems and barriers to in overly simplistic terms. A similar
diversity practice regarding BAME
progression of BAME managers point could be made about the
representation and practices in the
• uncover company and individual diversity of non-BAME groups.
FTSE 100
actions which are helpful in enabling
• case studies of seven companies Different businesses may settle on
progression
(five in the FTSE 100, one exemplar different terms. Whatever the language,
• make recommendations to from the FTSE 250, and one we emphasise that the important thing
accelerate inclusivity and enable exemplar outside the FTSE 250). is for businesses to have the
UK organisations to benefit from conversation in the first place and to
a greater proportion of BAME As this report shows, many managers take action that delivers change. As
managers and leaders. are nervous of talking about race and one leader told us: Better to apologise
ethnicity, wary of causing offence by for something said with the best of
The approach taken included: using words that some find intentions, than to stay silent and
inappropriate. We recognise that there perpetuate the real issues around
• a review of current literature, is an ongoing debate about the best diversity at work.
research reports and policy language to use. The Parker Review
documents relevant to BAME refers to ‘people of colour’, a term
diversity in the FTSE 100 often used in the US. BME – black and
• identification of key themes and minority ethnic – is still widely used.
practices through a workshop and Others have suggested ‘visible
roundtable discussion including 13 minorities.’
companies, hosted by Google
We decided to use BAME – Black,
• follow up data gathered with 26 Asian and minority ethnic – and
interviews with pairs of BAME and non-BAME, terms that are widely used
non-BAME managers in equivalent and understood across business and
positions across 12 FTSE 100 academia alike. Even these have limits
companies4 though. For instance, one global
business we interviewed said they
avoid using BAME, because it does
not translate to territories where black
4
At time of interview
114. THE BIG PICTURE – LITERATURE REVIEW
To set the context for our research, In the UK, some 14% of the population business leadership will widen, raising
we reviewed the latest literature are currently from BAME groups. By both ethical questions of fairness in
from business, policy and academia. 2030, this proportion is expected to selection and inclusion,11 and questions
This summary synthesises key rise to 20%, reaching over 30% by about business performance in a
insights about the situation of BAME 2051.6 Employment rates among BAME diverse world.
leaders and managers in the UK, and groups of working age are lower overall,
what’s known about the FTSE 100 at 62.8% compared to 75.6% for 4.2 BAME diversity in higher
specifically. individuals identifying as white. Among education
Pakistani and Bangladeshi groups the Increasingly, the management and
4.1 The management population employment rate drops to 54.9%.7 leadership population is drawn from
and the working population as a graduates, so the diversity of the
whole There is also a pronounced student population is important to the
Diversity in management is an representation gap in management future management pipeline. In 2007,
increasingly high-profile issue for and leadership roles. In 2007, BAME students made up 17% of UK
business, with recent reports such only 6.8% of the BAME working undergraduates, which would suggest
as the Parker Review on the ethnic population were described as being in an increase in the BAME working
diversity of UK Boards (2016), led by management positions.8 What’s more, population in future. However, as these
Anglo-American Plc Chairman Sir John this gap appears to have widened BAME graduates are in their early
Parker, and the review by the former between 2007 and 2012.9 years in the job market, there is no
Mitie CEO, Baroness McGregor-Smith, evidence yet of any increase in those
on Race in the Workplace (2017). In total, analysis by the UK’s Department reaching management positions.12
for Business, Energy and Industrial
These reports make clear that business Strategy shows that the potential Analysis has shown that elite universities,
imperatives are changing. Consumers benefit to the UK economy from full such as the Russell Group, do not have
are increasingly international and representation of BAME individuals proportionate BAME groups.13 BAME
diverse in race and ethnicity, globally across the labour market, through students tend to study in cities with a
and in the UK. Between 2015 and improved participation and progression, high BAME population, clustering around
2050, it is projected that one half of is estimated to be £24 billion a year (1.3 London, Birmingham and Bradford.
the world’s population growth will be % of GDP).10 When it came to subject choice,
concentrated in nine countries, five of BAME students were found to favour
which are in Africa and three in Asia.5 In short, whilst there are changes in entrepreneurial subjects. However,
Currently, the FTSE 100 derives more economically active populations in differences were found in employability
than 75% of its sales from outside the production and consumption both post-university, where a smaller
UK. Future commercial success is in the UK and around the world, these proportion of BAME graduates compared
therefore likely to require more diverse changes are yet to be reflected in the to non-BAME graduates found graduate
business leadership. general UK working population or level jobs. In 2012, only 10% of workers
senior leadership. If there is no change, on the first rung of the promotional ladder
the gap between the population and were from BAME groups.14
5
Parker 2016 6 Parker 2016 7 McGregor-Smith 2017 8 BiTC 2007 BiTC 2015a
9 10
BEIS 2016
11
Groysberg and Connolly 2013; Saggar et al 2016 12 BiTC 2015a BiTC 2011
13 14
Kirkton 2009; BiTC 2011
124.3 An issue with the Further research on intersectionality Mentoring is one area that
management pipeline? informs us that BAME professional
A previous study by CMI of BAME women often fare less well than BAME has been identified as a
and non-BAME managers showed professional men who, in turn, fare crucial positive factor in
that higher proportions of black and less well than non-BAME professional supporting BAME career
Asian managers indicated that they men.23 Hence, when collecting data
would like to become a CEO, a board companies will need intersectional data progression.
director or a non-executive director. by gender and race/ethnicity and other
However, the existence of an ‘old boys’ protected characteristics, such as
network’, a lack of career guidance, disability, age and sexual orientation,
and discrimination were all identified as in order to properly understand the
barriers to progression.15 nature of dynamics in the pipeline.
Unconscious bias has been an Differences in workplace culture may
increasing area of focus for businesses also affect satisfaction at work. One
and researchers. Analyses of trends survey of 24,457 workers found that a
in management and leadership higher proportion of BAME employees
recruitment suggest unconscious (65%) said they enjoyed working for
bias may play a role during all their organisation than their white
stages of the process, affecting colleagues (61%). However, a high
BAME candidates.16 Other research proportion of Bangladeshi (34%),
suggests that a dominant ‘white, male’ black Caribbean (29%) and black
discourse in organisational culture African (24%) employees said they
affects the ‘acceptable criteria’ used were dissatisfied with their career
in recruitment and promotion.17 BAME progression.24
candidates may not be regarded as
meeting these ‘traditional’ criteria In this survey, BAME employees
and are less likely to be seen to also reported witnessing or
have the potential to ‘fit’ with cultural experiencing bullying/harassment
perceptions of a ‘good leader’.18 Even from managers (reported by 28% of
the provision of feedback to candidates BAME employees), from colleagues
has been found to be more extensive (32%) or clients/customers (17%).28
for non-BAME than BAME people.19 In the wider literature, bullying and
harassment are reported to be enacted
Reinforcing the notion of a perpetuating disproportionately on BAME workers.25
white, male discourse, an interview
study of 130 BAME and non-BAME When it comes to enabling
women found that 90% of BAME progression, there is some evidence
women felt they had to leave their about what works. Mentoring is one
culture behind in order to progress in area that has been identified as a
their organisation.20 This was despite crucial positive factor in supporting
perceiving that their cultural identity BAME career progression.26 In one
impacted on their own approach interview study in 2012, more BAME
to leadership. Many women, in employees had mentors, sponsors or
particular from the Bangladeshi and role models. A higher proportion of
Pakistani ethnic groups, believed BAME employees that did not have a
they were discriminated against. This mentor would have liked one than their
finding is reflected elsewhere, where white colleagues. Similarly, a higher
appearance, religious belief and proportion of BAME workers (40%)
traditions were repeatedly questioned were interested in fast-track
and there was a perceived obligation management programmes compared
to participate in out-of-work activities to their white colleagues (18%), but
that made them feel uncomfortable.21 only 8% of BAME employees had
Additionally, while half of BAME gained places on such programmes.27
participants felt that their organisation
was a place for progression, many felt
that they were under-utilised (30%) or
overlooked (18%).22
15
CMI 2008 16 Wood et al 2009; BiTC 2014; Wilson 2014; Saggar et al 2016 17 Jenkins 1988; Saggar et al 2016; McGregor-Smith 2017 18 Grint 2005; Wilson 2014
19
Noon 1993 20 BiTC 2012 21 EOC 2007; Saggar et al 2016; McGregor-Smith 2017 22 BiTC 2012 23 Healy, Bradley et al. 2011, Oikelome and Healy 2012 24 BiTC 2015b
25
Westhuses 2004; McGregor-Smith 2017 26 BiTC 2012 27 BiTC 2015b.
134.4 Focusing on the FTSE 100
FTSE 100 companies 2014 2015
There is little research relating to the
FTSE 100 specifically. A snapshot Number of Chairs who are BAME 2 3
of ethno-cultural diversity in the top
Number of CEO who are BAME 6 4
rungs of these companies shows
that BAME groups are under- Number of CFO who are BAME 3 4
represented at top levels.28 Table
1 opposite depicts the numbers of % Non-executive directors who are BAME 5.8 6.8
BAME leaders in the top levels of % Executive directors who are BAME 5.2 4
these companies in 2014 and 2015.
While some changes may reflect % Operating board members who are BAME 6.5 7.4
companies moving in and out of
Table 1: BAME group leadership and management representation in FTSE 100 (adapted from Green
the FTSE 100 as well as changes Park Leadership 10,000, 2014 and 2015).
within companies, the overall
message is clear. Fifty three FTSE A lack of inclusion is not only a to do it, remain under-researched.
100 companies had no directors problem for business. In the wake of There are many helpful suggestions
from BAME groups and just seven the EU Referendum result, the Home and recommendations, but there is
companies accounted for over 40% Office noted a “sharp increase” in relatively little multi-method, in-depth
of BAME representation at director racial abuse and harassment.30 In this research that seeks to go beyond
level – five of these seven having context, business has an even more the ‘what’ question into the ‘how’
previously been headquartered important role in improving inclusivity and ‘why’ questions of changing
outside the UK.29 and diversity.31 practice: something this report seeks
to address.
Health, banking and finance rated However, detailed questions of
relatively highly for diversity in what business should do, and how
leadership roles, while utilities,
engineering and construction and
property were least diverse in their 2014 – % BAME 2015 – % BAME
top leadership.
Top 20 Roles
4.5 Conclusion: implications from Natural resources (11.2%) Health (15.9%)
the literature and the future of Top 3 sectors Industrials (9.5%) Natural resources (11.7%)
UK business Health (9.0%) Technology (9.1%)
The literature shows that while Engineering (2.0%) Construction and
the BAME working population has Construction and Property (2.2%)
Bottom 3 sectors
increased in recent years, this is not Property (1.6%) Utilities (0%)
reflected in the diversity at senior Utilities (0%) Transport (0%)
management levels. This lack of Top 100 Roles
ethno-cultural diversity is apparent in
Natural resources (10.4%) Health (10.3%)
the FTSE 100. Issues with the pipeline
Top 3 sectors Industrials (9.5%) Banking and Finance (8.1%)
for management and leadership Health (8.0%) Consumer (6.4%)
have been identified including
organisational culture issues, a lack Construction and Construction and
Property (1.6%) Property (3.1%)
of effective mentoring and monitoring, Bottom 3 sectors
Engineering (1.0%) Engineering (2.6%)
culture-specific construction of Utilities (0.0%) Utilities (1.8%)
selection criteria, unconscious bias,
and bullying and harassment, which Table 2: BAME group representation in the FTSE 100 by sector (adapted from Green Park Leadership
can deter people from applying. 10,000, 2014 and 2015).
28
Green Park 2014 29
Parker 2016 30
Home Office 2016 31
CMI 2017
14CASE VIRGIN MONEY
STUDY
Virgin Money’s People Director, Matt measures allow the company not only to within the company and through these
Elliott, and Head of HR Business track trends, but explore how minority partnerships.
Partners, Dan Perrett, describe a groups feel about managers and the
range of exciting initiatives and opportunities they have for access to “We want to make sure the [Affinity
innovations relating to BAME leadership pipelines. The data is fine- Group’s] action plans are dedicated and
diversity and inclusion practices. As grained enough to track diversity trends achieving what we want…appreciating
a FTSE 250 company, Virgin Money at a local level. For example, population that, although there might be commonality
currently employs 3,000 people in diversity of the North East of England is between gender and ethnicity in terms of
the UK. Following the acquisition of different to that of London. This means needing mentoring, there might be different
Northern Rock in 2011, the company that diversity targets can be set to ways we will approach mentoring… From
expanded tenfold. This rapid change reflect the local population. Additionally, an ethnicity point of view, we may not have
in employee profile has pushed the these measures allow the company to the right mentors in-house, so we will work
diversity and inclusion agenda to track the effectiveness of their diversity with EMpower or the BBBA to say ‘can you
the fore in the last three years. Their and inclusion initiatives and listen to get someone in your existing organisation
BAME diversity and inclusion work employees to determine how to improve. partners to help mentor?’”
is ongoing and will continue to take
priority for ongoing development “We have adopted the Parker Review Storytelling to facilitate diversity
over the coming years. Among many now. The report says we have to 2024 as and inclusion
examples, a few of their innovative a FTSE 250 company to be compliant… Virgin Money also recognise that
practices are described here. it’s now live, we’ll comply with the sometimes the little things can bring
recommendations before then… We’ve got about cultural change. A bottom-up
Overall company ethos and approach to create a talent pipeline to make sure that development in Virgin Money has been
to BAME Diversity and Inclusion happens.” the use of storytelling. Employees are
Virgin Money’s central purpose of encouraged to write a memo about an
Everyone’s Better Off (EBO), is seen to be Affinity Group experience (for example, what it is like
all-consuming and part of all employees’ Over the past year, Virgin Money has to be a Muslim woman in the company)
day-to-day work. This ethos is about launched an Affinity Group, which is and place it on the company intranet.
fairness, transparency and encompasses employee-led and focused on building These stories are widely read by company
diversity and inclusion. The purpose diversity. While at an early stage of employees. Authors of these stories have
around EBO is to be welcoming and development, the Affinity Group has split reported a huge influx of personal support
equally engaging to all. This ethos applies into specific networks (including BAME) and these stories have led to company-
both to how Virgin Money aims to serve and they are developing actions plans wide learning about diversity.
customers and how company employees for what they want to do and support.
are treated. To facilitate EBO, an ExCo Examples of work they propose to do “She simply wrote a memo [of her personal
member has responsibility for each include: identifying and training BAME experience of being a Muslim woman] and
dimension of diversity, including BAME. role models in the company; the rollout of we put it on our intranet… We were taken
The company has an action plan for unconscious bias training company-wide aback when we saw that over 2,000 of the
BAME diversity and inclusion from which in 2017; and connecting with the local 3,000 people in our company individually
progress is reported at Exco every month. business community on diversity issues. read it… so we started to get people
coming forward and saying, ‘I’d quite like to
“EBO for colleagues [comes] down to “Through the Affinity Group we effectively share my story’… People are writing about
being welcoming to all and we want it to go to all our BAME people in our organisation their own faiths… these stories get read in
be equally engaging for the people who [and ask] ‘so how do we put you in a place the company… so some of the little things
are here – where people can simply be where you can be a role model for the really bring about cultural change.”
themselves at work.” company?… It doesn’t matter what your
seniority is, we want you to be someone
Tracking company BAME diversity who can talk confidently about this
As early adopters of the recommendations company to [BAME] people… in return
from the Parker Review, Virgin Money we will equip you to be able to do that.’”
have implemented BAME diversity
measures in a range of ways. First, they A partnership approach to facilitate
are tracking recruitment data; second, BAME talent pipelines
an annual engagement survey (94% Virgin Money emphasises the importance
completion rate) has for the last four of partnership working to create BAME
years included a diversity and inclusion talent pipelines. As a founding member
element; third, the company has asked of EMpower and with their continued
employees to complete an “About me” support of the British Black Business
survey which is in its second year. This Awards (BBBA), this is prioritised
is helping complete the employee data through education, mentorship and
profile in the core HR system. These the identification of BAME role models
155. FTSE 100 PRACTICES: WHAT HR
AND D&I LEADERS ARE SAYING
What are companies doing (Section 5.1), good practice 5.1 Company performance on and
to address the under- approaches (Section 5.2) and attitudes towards diversity
representation of BAME groups resourcing (Section 5.3). Respondents rated their organisations’
in the management pipeline? performance in creating a diverse
We surveyed HR and Diversity/ Respondents were also asked what management pipeline, both in terms of
Inclusion leaders about current would be the one change that they race and ethnicity and on dimensions
activity – and found a widespread would identify that would most improve such as gender, sexual orientation, age
view that business needs to do the career progression of BAME and disability. Just 17% rated current
much more to drive change. managers in their company. These performance on race as good; 46%
responses have been highlighted rated it as average; and 38% rated
Our survey of HR and D&I leaders throughout this Chapter. performance as fairly poor or very
across the FTSE 100 was designed poor (see Figure 1). None rated their
to understand the human resource Twenty four companies responded to company’s record as very good.
management practices being used the survey, enabling insight into the
to promote diversity of staff, and to 0diversity practices
20 of nearly a quarter
40 One respondent
60 stated:
80 “The lack of 100
identify the actions undertaken to of FTSE 100 companies. While we BAME people in my company makes
support recruitment and progression are careful about generalising from me feel ashamed. It is inexplicable
of BAME employees. the results, they do provide valuable unless you accept there must be
insights into leading companies’ discrimination in our culture.”
Findings are presented in three approach to the BAME pipeline
sections: company performance and associated HR and diversity This poor rating of BAME diversity
on, and attitudes towards, diversity practices.32 performance is in contrast to gender,
Very good Fairly good Average Fairly poor Very poor
Gender 21% 63% 17%
Sexual orientation 17% 17% 38% 21% 8%
Age 4% 29% 63% 4%
Race 17% 46% 25% 13%
Disability 4% 8% 42% 25% 17%
Figure 1: Rating company performance in creating a diverse management pipeline 33
32
See Appendix for more on the methodology
33
Due to rounding of decimal points, percentages may not add exactly to 100 throughout
16Agree Neither agree nor disagree Disagree
A person’s race or ethnicity has no impact on 71% 17% 13%
their career prgression in my company
My company is taking active steps to
improve race and ethnic diversity 71% 4% 25%
throughout the management pipeline
Senior leaders actively champion race and 54% 17% 29%
ethnic diversity in the management pipeline
Figure 2: Attitudes towards company performance on BAME diversity.
where 84% reported that their have fewer than five per cent BAME
organisations’ performance was fairly at senior management level, and
or very good. 83% report they have this low level at
board level, indicating another area for
These results are fully supported by improvement.
our discussions with HR and D&I
leaders throughout this project. Many One respondent noted: “[We are]
told us that the “gender agenda” was below the average for the UK working
at a more advanced stage of action, population and [diversity] declines
with many feeling that they were just as the seniority increases. There
beginning to work on BAME diversity is definitely a lack of proportionate
– which may prove more complex. BAME representation from middle
For one such company, see our Virgin management upwards. This is visible
Money case study, page 15. across all business areas in our
company.”
Data on the management pipeline Geography and the location of the
83% of respondents reported their company’s workforce is also a relevant
company needed better quality data to factor for some: “We don’t have
improve race and ethnic diversity. Data representation even in locations (like
collection on BAME is an on-going London) where you might expect
challenge for FTSE 100 companies, a higher proportion. It’s shockingly
not least to be able to map the current bad. And [that] does seem to be
representation of BAME employees exacerbated by the fact that [our
in the management pipeline. One sector] is not necessarily a career
respondent explained: “We started of choice at the best of times. Our
voluntarily collecting diversity data a reputation as an industry is poor.”
83%
couple of years ago and have had a
low response. So although we hold
data, we don’t have sufficient to be
able to split by management level so
these are estimates of the proportions OF RESPONDENTS
at those levels.” REPORTED THEIR COMPANY
NEEDED BETTER QUALITY
Based on what data they do have, DATA TO IMPROVE RACE AND
respondents reported that BAME ETHNIC DIVERSITY.
representation in their companies
was particularly low at senior levels
(see Figure 3). 54% reported they
17Less Between Between More Don’t know
than 5% 5% and 10% 10% and 20% than 20% / not sure
Box A: What one
100%
change would most
80%
83
improve the career
progression of BAME
60% 54 managers in your
50
42 company?
40%
29 “Representation targets or
25 25
20% 17 17 objectives across all line
8 8 8 8 8 8 management (not just senior
4 4
0 0 0 managers)”
Junior Middle Senior Board
management management management level “Targets across all grades, like
we do in the gender space”
Figure 3: Percentage of BAME employees across the management pipeline in the UK (based on data
available or estimates)
“Understanding the current
picture through data collecting
Monitoring and reporting on targets stated that they planned to and linking data to show pay,
performance set progression targets in the next performance, potential and
Reflecting the challenges of collecting 12 months. For some this was their engagement levels of BAME
good quality data, we found a ‘One Change’ (see Box A). compared to others”
declining scale of action with respect
to how BAME data is used (see Table Targets were often aspirational, for
3). While 79% collect and hold some example: “We have put in place
employee data – albeit perhaps aspirational targets which ensure
limited or poor quality data – only that we have representation on
54% then monitor and track diversity. development programmes which
Only 21% report publicly on race and are in line with UK averages. Our…
ethnicity and set progression and programmes are essential for those
representation targets. In contrast 75% moving between grades. Cohorts
set progression/representation targets should not go ahead if they are not
for gender. This result is reflected in representative, making managers look
the case studies in which companies for talent harder. We have also hosted
stated that targets were difficult to set BAME-only colleague development
before appropriate data were collected. events.”
Engaging staff by setting targets for Another respondent stated: “We aspire
progression and representation at to have 18% BAME representation
different levels in an organisation is an in our… manager population with
essential requirement for organisations a staging target of 14% by 2018…
to take BAME equality seriously. and 10% BAME representation in our
Encouragingly, almost half (47%) senior manager and departmental
of those who do not currently have director population by 2020.”
Sets
Collects /
Monitors / tracks progression/ Reports
holds employee
diversity (%) representation publicly (%)
data (%)
targets (%)
Race and
79 54 21 21
ethnicity
Gender 71 67 75 71
Age 92 50 4 8
Disability 58 25 0 4
Sexual
54 21 4 8
orientation
Table 3: Data collection, monitoring, targets and reporting.
18CASE SCHRODERS
STUDY
Rafael Campos Valdez is newly them challenge the way things are run
appointed as HR Business Partner – within their departments. Rafael says that
Diversity and Inclusion at Schroders. manager buy-in is key to the success
He looks after everything related of any diversity and inclusion initiative.
to diversity and inclusion within He identifies very positive engagement
the company. Schroders’ Group from managers around diversity and
Chief Executive, Peter Harrison, inclusion within Schroders. Employee
took on the role in April 2016 and empowerment is also seen as vital at
the diversity agenda is a priority Schroders to lead change. This is led
in ensuring that the company is a through engagement with employee
progressive, inclusive organisation. resource groups. Rafael runs a committee
Rafael states the importance of the of all employee network chairs and also
work on inclusion and diversity not meets them regularly on a one-to-one
being labelled an HR-only project. basis. Additionally, each network has a
He believes the key to the success GMC sponsor who will meet with them
of implementing the inclusion and to discuss issues and provide a link for
diversity agenda at Schroders is the network to senior levels within the
involving the whole business. company.
Data capture, developing targets “The only way for real change to occur
Since 2016, Schroders have developed within a company is by having a pincer
a diversity capture option on their HR approach, support from the very top
database that allows employees to self- and from a grass-roots, employee-led
declare diversity data (ethnicity is one of angle… This is the approach we have
the options). As data are gathered, Rafael taken at Schroders and I can see changes
will be able to overlay ethnicity data with occurring… A lot of time, organisations
talent mapping data. This will provide create staff networks but don’t equip them
information of what the management with the tools, voice or resources to make
pipeline looks like – from here Rafael real change… We’re empowering our D&I
will be able to amend the Diversity and leaders to help Schroders become more
Inclusion strategy to reflect the new diverse and inclusive.”
talent pipeline insight gained. He plans
an active campaign to raise the profile of Training
the importance of data capture. However, When people become managers in
Rafael emphasises that lack of data Schroders they are provided with training.
should not preclude companies from This includes an element specific to
taking action on diversity and inclusion, inclusive leadership, covering managing a
and it has not prevented him from diverse workforce and being line manager
moving forward diversity initiatives within to a diverse team. While specific diversity
Schroders. training is important, Rafael is looking to
embed diversity and inclusion education
“Organisations should stop using lack of across their suite of management training
data on ethnicity as an excuse to not start offers.
taking action…Whilst data is critical for
understanding our workforce, tracking “It’s more like a sprinkling across all of our
progress and running analysis to find offerings, instead of ‘go on diversity for
trouble areas, it is not critical to shifting the one day’ and then you don’t hear about
dial on ethnic diversity... We have a Muslim diversity again for a year… We do have
association that has consulted on our new e-learning around diversity in the workplace
prayer room… These are the kind of things and discrimination… that’s important, but
you can do without these figures.” when it comes to engaging employees,
[to say] this is what a good manager looks
Manager and employee empowerment like, it’s [diversity and inclusion that is]
Each General Management Committee actually core business, I think changes the
(GMC) member has a diversity and conversation more.”
inclusion objective and Rafael works
closely with the GMC members to help
19Improved business performance 75% Lack of diverse role models 67%
Greater understanding of customer/ Gender diversity is a higher
50% 42%
reflecting a diverse customer base priority in the company
Improved business culture 33% Difficulty of acquiring reliable data 33%
on race and ethnic diversity
Greater access to different Difficulty of what language/terminology to
29% 29%
perspectives/points of view use when talking about race and ethnicity
Reflecting local communities/local Perceptual, cultural or communication
25% 25%
labour market barriers
Because it is the right thing to do 25% Stereotyping and preconceptions 17%
of roles and abilities
Improved reputation as an Lack of senior leaders to act
21% 13%
employer of choice as mentors or sponsors
Improved ability to respond and 13% BAME employees find it harder to access 13%
change through innovation values career/development experiences
Better communication with 4% Resistance to change from middle 8%
customers managers
Improved brand among customers 4% Lack of commitment from senior leadership 4%
Exclusion from informal networks
Increased product innovation 4% of communication 4%
Increased legitimacy 0% Other 8%
Figure 4: Top five business drivers for improving BAME pipeline. Figure 5: The biggest challenges in promoting race and ethnicity
in the pipeline.
Business drivers for BAME diversity Intriguingly, the priority given to
There were clear business drivers gender was the second most widely-
for taking BAME diversity seriously. cited challenge. While lessons
Asked to pick the top five drivers, can be learned from the progress
improved business performance made on gender, this suggests that
was most often cited, supporting management time and resources have
the argument that diversity is good been dedicated to driving change on
for business (see Figure 4). This was gender – or even that some businesses
followed by improved understanding may be complacent that their efforts
of a diverse customer base, benefits to on gender means they have ‘done’
the business culture as a whole, and diversity. (Indeed, BAME people also
access to different perspectives and have a gender and yet, because BAME
points of view. data is not often connected to gender
data, organisations are often unable
Notably, only a quarter reported that to say whether BAME men and BAME
action was driven by a social justice women fare differently from non-BAME
imperative, i.e. that ‘it is the right thing men and women. These issues of
to do.’ This raises the question that if intersectionality represent a further
there is no business imperative, then level of challenge for companies. In
no action to improve inequalities may discussion, some recognised the
be likely.34 It is clear that senior leaders challenge – but often lacked well-
need to keep making the business developed solutions.)
case for diversity to tackle inequalities.
These top challenges were followed
The biggest challenges in by the difficulty of acquiring reliable
promoting race and ethnic diversity data, the difficulty of what language/
in the management pipeline terminology to use, and perceptual,
In line with the findings from the cultural or communication barriers.
qualitative interviews and case studies,
a lack of BAME role models was
ranked as the top challenge facing
companies in promoting race and
ethnic diversity, cited by 67% as shown
in Figure 5.
34
Noon 2007
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