The Governance Institute, together with Women on Boards recently hosted an expert panel discussion on Diversity and Inclusion (D&I) issues, including insights into the actions/strategies that have proven to be effective in driving progress and the many recent 'watershed' events/reports that are adding to the existing pressure on organisations to shift their approach. Listen to the recording: Diversity is half the circle, culture, equity and inclusion are the other half.

A high level summary of some of the key themes raised in the discussion is below.

Clarifying the difference between diversity and inclusion 

Broadly, the panellists agreed that where diversity is about representation – representation of people with a range of different characteristics eg gender, ethnicity/race, etc – inclusion focuses on the behaviours that enable and support diversity – the culture that enables, values and supports diversity within organisations.

Women on Boards Executive Director, Claire Braund summed this up as follows: 'diversity is the what and inclusion is the how'.  

Reflecting on her own experience as a woman, a woman of colour and an engineer, Sydney Water Corporation Non-executive Director, Dr Marlene Kanga observed that in a sense the diversity piece is 'the easy part'.  She reflected that in order to gain traction, there also needs to be understanding and acceptance across the organisation around why diversity is important and valuable in a business context – an appreciation of why diversity is key to business success.  She suggested that firms need to think about diversity 'as the reason' (ie business success) and that this will then drive inclusion.  

'Gender fatigue'

The discussion touched on the challenge of what is sometimes called 'gender fatigue' or the perception (particularly among some men) that gender inequality in workplaces is not a problem, despite evidence to the contrary including for example, the persistent gender pay gap, the underrepresentation of women in leadership positions and recent reports into the culture in Australian workplaces.  

[Note: Panellists referred to a recent report from FINSIA highlighting this issue.  The report referred to appears to be FINSIA's 2021 report: Gender Divide in Financial Services 2021]  

The discussion also touched on the related challenge for organisations in dealing with the 'backlash' toward D&I initiatives and the gap between reality – measures being implemented to address structural inequality – and perception among some groups that they are being unfairly disadvantaged.

Despite the fact that the 'business case' for diversity has so far not delivered change or changed (some) minds, a key theme to emerge from the discussion was the important role that strong, focused leadership. combined with a data-driven approach can play in this context. 

What works? The power of a data driven, systematic approach combined with focused, committed leadership 

Dr Kanga spoke about the important role that business leaders – the board, the CEO and the executive team – play in countering a 'we've done this already' mindset and driving concrete progress.  

Reflecting on her own experience, she said that some boards have been successful in closing their gender pay gaps 'within a couple of years' through taking a data-driven, systemic approach to the issue - calling for analysis of the pay gap within their organisation, identifying the reasons for it, implementing actions to address it, and then monitoring progress.  Dr Kanga emphasised that sustained leadership focus on the issue, and monitoring/oversight of the effectiveness of measures being implemented, is key to progress.  

Later in the discussion, and again reflecting on her own experiences in the engineering sector, Dr Kanga described how 'borrowing' from the approach taken to lifting standards of workplace safety had been effective in driving progress in the D&I context.  Dr Kanga said that this had the advantage of rendering the desired systemic changes concrete as opposed to 'esoteric' – similar changes and reporting requirements had been implemented already in the safety context – and meant that managers accorded them the same high level of importance.

On a similar note, Governance Institute of Australia CEO Megan Motto described the data-driven approach to addressing the loss of women in the leadership pipeline, which has been used successfully by some engineering firms, to illustrate the power of data in changing otherwise fixed mindsets.  Ms Motto explained that the firms in question knew that the number of women decreased as they progressed up the organisational hierarchy starting a graduate level.  In an effort to address this, the firms paid female graduates 3% more than their male peers.  However, a closer look at the data showed that after 12 months at the firm, female graduates were actually earning 5% less than their male peers.  

Ms Motto said that this realisation highlighted the existence of a 'a structural impediment' to women's progression and prompted investigation into its causes and the adoption of an interventionist approach to address it.  

However, despite the power of data to highlight the problem and enable assessment of the effectiveness of actions to address it, Ms Motto reflected that it is still not being utilised by nearly enough firms.  

Quotas?

Ms Motto opined that implementing targets is 'more difficult to implement than people think' but seemed to suggest that 'targets with teeth', combined with interventionist strategies to level the playing field, could be valuable as a means of forcing a change in the way things are done.  

Panel Chair, journalist and author Catherine Cox appeared to be in agreement, querying how, without data, people can be convinced of a need for change.  

Pressure is mounting on organisations to make progress 

Though there is no 'one thing' or 'silver bullet' that is an answer in itself to addressing the lack of progress on D&I issues, the panel agreed that there are a number of actions, or a number of known silver bullets, that used in combination, have proven to be effective.  

On the issue of whether any one of the recent watershed events or recent reports will prove to be a tipping point, the panellists reflected that it is unlikely that any one event/report will trigger a shift (though there was optimism that this would be the case).  It was suggested instead there have been a number of 'watersheds' in recent years and that in combination these are adding to the existing pressure on organisations (from the community and from investors who increasingly view D&I as a key governance issue) to achieve progress. 

[Source: This post is based on notes from a Governance Institute and Women on Boards Webinar: Diversity is half the circle. Culture, equity and inclusion are the other half, 04/02/2022.  Access the recording Diversity is half the circle, culture, equity and inclusion are the other half]