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Business Assurance - ViewPoint

Are companies taking advantage of diversity & inclusion?

Overall story

Diversity and inclusion (D&I) is increasingly seen as a business continuity requirement. In the latest ViewPoint survey attitudes of companies towards D&I and how they work to achieve their ambitions were investigated. Most companies indicate that D&I is an important part of their agenda, but the survey also reveals that most companies are early in their D&I journey. Organizations refer to this broad topic in different ways. Respected reports and studies, such as those by WBSCD and McKinsey, use the term diversity, equity and inclusion, However, for the purposes of this study the term diversity and inclusion (D&I) was used. Research shows that organizations with homogenous groups can be more efficient when simple tasks are to be done quickly. Diverse teams are likely to solve complex problems faster but can be more difficult to manage. Thus, psychological safety is needed to have high intellectual and low social friction.  For companies dependent upon fostering creativity, innovation and making good business decisions, though, D&I has proven to be an asset. Most companies in the survey have yet to derive business benefits from their D&I efforts, but with the benefits of D&I mounting, organizations are taking tangible steps to integrate it into their strategies, operations and cultures.   When asked what D&I means to them as individuals, respondents rated equal opportunity the highest (65.2%) followed by acceptance (58.1%) and respect (50.1%). It is noticeable that individuals tend to choose terms that are general in nature, especially when the context is organizational, but will use specific terms such as race and gender identity when considered significant on a more personal level.

A fragmented approach

On an organizational level, most companies indicate that D&I is important and part of their agenda but few report deployment of tangible actions in a structured way. Just 7.3% consider themselves as leading. Less than one in three companies have set a company-wide policy, but over half (51.9%) focus on a pilot or single initiative only, indicating a fragmented rather than holistic company approach. However, most companies are progressing. Focus seems to be on principles & objectives (41.8%) and accountabilities & responsibilities (36.8%). While fewer companies focus on targeted actions and metrics. When starting a journey, metrics is often not the natural first step. Yet, to improve maturity and progress, measurements and metrics are essential to a structured approach and progress. A general norm seems to be that D&I falls under human resource (HR) departments. However, top management ownership and accountability are essential to make any topic core to a company and its business agenda.  The survey revealed that 14.2% of companies say that their organization does not have a clear leader for D&I efforts and a quarter of respondents did not know how it was being run in their organizations. As things stand, the biggest drivers in improving D&I in an organization appears to be a desire to attract and retain talent (51%) followed by societal pressure and reputation.  Non-compliance with legal requirements comes in fourth with 40.9%. This could be due to media attention and various movements that have run, such as #MeToo and #BlackLivesMatter.  It also implies that less attention has been paid to connecting D&I to business aspects like innovation and productivity.

Systemic approach and change of culture needed

Companies seem to have applied a broad range of actions, primarily driven by internal factors such as culture, recruitment and equal opportunities. This is also largely reflected in obstacles to improving.  What does stand out is that one in 3 seem to recognize that the lack of a systematic approach is a significant hurdle. However, there is a significant lack of awareness around ISO and other D&I standards. This could be because the leading standard ISO 30415 was only released in 2021. A total of 72.8% indicated limited or no familiarity at all, with just 1.6% saying they are very familiar.

Opportunity to improve

There is therefore considerable opportunity for companies to tackle challenges such as the lack of systematic approach, best practices and management & leadership commitment, basing their approach on international standards such as the ISO 30415. This would enable a systemic approach and help to create a platform from which to structure their strategy and objectives, including setting goals and measuring performance. To truly connect D&I with the business, commercial aspects and branding, it is recommended to integrate D&I strategies and initiatives into a company’s overall business strategy and reporting framework, truly integrating it into the operational perspective. The company approach chosen often reflects whether D&I is viewed to be a value or a burden, a competitive advantage or window dressing.

Diversity and inclusion management

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