Finance and the diversity dividend

Last Friday's conversation was with two CMI companions who are leading financial experts and diversity campaigners: Melanie Richards CBE, deputy chair of KPMG, and Janet Thomas, founding chair of Infinity Capital Partners and former president of Women in Banking and Finance. Here are the highlights:

Good marks to government; now time to drill down

Melanie and Janet praised the government’s rapid, blanket financial support in the crisis. “I think the government has behaved very responsibly, and they have been very creative,” Janet says of the economic support measures. “They’ve listened and taken feedback and recalibrated,” adds Melanie.

Both experts believe the time has come for more targeted, specific measures as the economic fallout continues. “The government is going to have to strike a balance between providing enough support to the right sectors and at the same time building confidence for us to start engaging with the economy properly,” says Melanie, who believes support should be targeted to those sectors geographies that are hardest hit. “I do think the government could think about what it’s doing to fund local communities to drive local economies.”

For Janet, it’s about supporting future-focused businesses like fintech. She praises the ‘green shoots’ that have arisen in places like London for funding start-ups and wants to see that continue. “We don't want to see a flight of talent to other countries,” she cautions. Equally, she sees protection for gig-economy workers as essential: “We need that part of the workforce to keep the economy bubbling over,” and to ensure Britain stays competitive in the medium and long term.

It’s not a meritocracy: targets to drive diversity

Janet and Melanie agree that progress on diversity has been far too slow everywhere, not only in financial services. For Janet, a blanket approach to diversity simply isn’t good enough: “I think one of the key problems we have when we talk about diversity is that as a group, it’s a big group, “ says Janet, advocating for us to break it down into specific subgroups and measuring the progress of each. “Even BAME is an aggregate set of data which actually gives a very misleading picture – what should have happened is categorisation for each group.”

She also finds the lack of targets a real issue: “If I want to make a change to business myself, I set measurable targets and track and monitor performance. I can’t understand why that has not been the approach for diversity objectives.” Melanie shares the view on targets but also points to what she calls ‘the very, very big elephant in the room’: “Unless we as senior leaders all start to acknowledge that our organisations can’t possibly be meritocracies where we have cadres of people who are not progressing, we will never truly reach equality,” she says.

Covid-19 inequalities & consequences

“Covid-19 has revealed the stark inequalities in our society,” cautions Janet, citing housing, healthcare and employment rights. In order to accelerate progress post-Covid, she wants to see more action – not just words. “It’s a fantastic opportunity for us to take a step back and reset,” she advises, calling on organisations to acknowledge that “they need to do much more to show they are committed to making the change.” This includes setting targets and acknowledging they simply haven’t moved fast enough.

Melanie would like to see a more systematic approach post-Covid, one that acknowledges there is no silver bullet. “It’s going to take real, concerted effort.” She feels the government can help by providing continued monitoring via initiatives like the Hampton Alexander and Davies reviews, and sanctions if things are not improving quickly enough. “Ultimately, there needs to be much greater [government] scrutiny,” and consequences for failure to progress, says Melanie.

How to cultivate diverse talent

How can financial services firms attract more diverse talent? “This is where many firms say they really struggle,” counsels Janet. She firmly believes the talent is there for those willing to look for it. Headhunters should work harder to establish good relationships with black executives and talent pools, and she praises those firms that already do this – such as Powerful Media. Melanie adds that headhunters are often guided by client behaviors, so it’s vital that hiring managers insist upon diverse shortlists, be hyper-aware of any unconscious bias practices, and recruit according to skills and competencies rather than “setting criteria in which they’re never going to get diverse candidates”. She also believes employers have to put more effort into targeting outreach programmes towards diverse communities, so that financial services is seen as an attractive proposition by those who wouldn't normally consider it. One example of this in action is the 100 Black Interns project, which seeks to help early career professionals kickstart a career in investment management.

Both experts also see apprenticeships as a great way of broadening the talent pool: “Apprentices are a great way of creating a kind of synergy between the education sector and business,” concludes Melanie, adding that her own career was forged without following the conventional university route.

Diversity a key to recovery

In the end, we all agree that a more diverse workforce is essential to expedite Britain’s recovery. “What we know is that we come to better solutions to problems when we have a diverse group,” says Melanie, adding that the crisis has made leaders more inclusive and collaborative. For Janet, tapping into multicultural Britain is an excellent way of helping the UK to reach the global economy: “It’s absolutely to our economic advantage to make sure that we have as much diversity as possible in our workforce.”

You can watch our conversation in full here.