A diverse workplace can benefit companies in numerous ways, from improved creativity and innovation to higher employee satisfaction and better financial performance. However, despite the increasing awareness of the importance of diversity, many UK companies still lack ethnic diversity in their leadership positions. In response, the UK government has set up the Parker Review Committee, which has recommended voluntary targets for appointing ethnically diverse board members and senior staff.
In 2015, the UK government created the Parker Review Committee, which was tasked with increasing ethnic diversity on the boards of Britain’s top listed companies. The committee recommended that every FTSE 100 company should have at least one ethnic minority board member by 2021, and every FTSE 250 company should have one by 2024. However, in 2020, a report showed that only 52% of FTSE 100 companies had met the 2021 target, and only 37% of FTSE 250 companies were on track to meet the 2024 target.
The Parker Review also announced the results of a 2022 voluntary consensus in March 2023:
In response, the Parker Review toughened up diversity targets for UK companies calling on them to meet broader voluntary targets for appointing ethnically diverse board members and senior staff by 2027. These new targets are designed to push companies to go beyond the minimum requirement of having at least one ethnic minority board member and to strive for greater diversity in their leadership positions:
Some UK companies have already taken steps to increase ethnic diversity in their leadership positions. For example:
Research has consistently shown that diverse companies perform better financially than less diverse companies. By increasing diversity in their leadership positions, UK companies could improve their bottom line. A study by McKinsey found that companies in the top quartile for gender diversity were 15% more likely to have financial returns above their respective national industry medians. Meanwhile, companies in the top quartile for ethnic diversity were 36% more likely to have above-average financial returns. These findings make it clear that diversity is not only a moral imperative but also a smart business decision. By ensuring that their leadership teams reflect the diverse backgrounds and experiences of their customers and employees, UK companies can make better decisions, develop more innovative products, and access new markets.
When discussing diversity, it’s essential to consider the intersection of different identities, such as race, gender, and socioeconomic status. UK companies need to ensure that they are not only increasing ethnic diversity but also addressing other forms of underrepresentation. For example, women of color face unique challenges in the workplace that are often overlooked when diversity initiatives focus solely on increasing the number of women or ethnic minorities in leadership roles. By taking an intersectional approach to diversity, UK companies can ensure that they are creating a workplace that is truly inclusive for all employees, regardless of their background or identity.
Unconscious bias can impact hiring and promotion decisions, making it harder for underrepresented groups to progress in their careers. UK companies need to take steps to address unconscious bias and create a more level playing field for all employees. For example, some companies are using blind hiring practices, which involve removing identifying information from job applications to reduce the impact of unconscious bias. Others are providing unconscious bias training for managers to help them recognize and overcome their biases .UK companies can foster a more equitable environment and culture, empowering all employees to achieve their maximum potential, by proactively tackling unconscious bias.
Diversity and inclusion have become increasingly important topics in the legal industry, as law firms strive to reflect the diverse communities they serve and create more inclusive workplaces. However, the legal profession still has a long way to go in terms of achieving true diversity and equity.
According to the Law Society of England and Wales, in 2020, only 17% of partners in law firms were women, and just 1.5% were from a Black, Asian, or minority ethnic (BAME) background. The lack of diversity is even more striking at the senior leadership level, where the numbers are even lower.
To address this issue, many law firms have implemented diversity initiatives and set diversity targets. For example, Linklaters, a Magic Circle law firm, has set and achieved the target of having 30% of its global partners be women by 2028. Meanwhile, Allen & Overy has set a target of having 15% of its partners in the UK be from a BAME background by 2025.
Some law firms have also implemented measures to address unconscious bias and promote diversity and inclusion in their hiring and promotion processes. For example, in July 2020 Clifford Chance launched multiple regional and global inclusion targets focused on gender, ethnicity and LGBT+. The Law Society’s Diversity Access Scheme (DAS) is a scholarship programme designed to promote diversity and inclusion in the legal profession.
Research has shown that diverse teams bring a variety of perspectives and experiences to the table, which can lead to more creative problem-solving and better decision-making.
In the legal industry, where complex legal issues often require creative and innovative solutions, having a diverse leadership team can be particularly beneficial. For example, a study by the American Bar Association found that diversity in law firms can lead to more creative problem-solving and better outcomes for clients.
Furthermore, diverse leadership teams can create a more inclusive corporate culture, where all employees feel valued and supported. This can lead to higher employee engagement and retention rates, as well as a more positive reputation for the firm.
One example of a law firm that has recognised the importance of diverse leadership is Hogan Lovells. In 2019, the firm launched a diversity and inclusion strategy that includes a target of having at least 30% of its partners globally be women by 2022. The firm also aims to increase ethnic and racial diversity among its partners and senior leadership team
While there is still much work to be done, it is encouraging to see private companies, including law firms taking steps to improve diversity and inclusion. The new diversity targets are designed to push companies to go beyond the minimum requirement of having at least one ethnic minority board member and to strive for greater diversity in their leadership positions. It is not only a moral imperative to address the issue of diversity, but research has consistently shown that diverse companies perform better financially than less diverse companies. By implementing initiatives and setting targets, these companies can create more inclusive workplaces that reflect the communities they serve and attract top talent from all backgrounds.
By Mallika Singhal
Loading More Content