The chair of CMI Race discusses how ethnic diversity can emulate the gender agenda, the nervous silence around race, and the cultish nature of uniform workforces.
Why was now the right time for the Chartered Management Institute (CMI) to release the Delivering Diversity report?
The gender agenda has been going for about ten years in earnest. It went from something that was seen as a secondary issue to something that was in the mainstream media. On the back of that, what we started to see was a little bit of dialogue about all the other interest groups around minorities.
If you start to look around, if you look at the next group of leaders or colleagues who are not necessarily equally represented in our business, race is the next big issue.
It was a combination of pull from the government and others – and at a grassroots level, organisations and leaders of colour themselves – saying we need to talk about this, because it is an issue that does not have the same profile or focus.
In basic terms, what is the business case for diversity at the boardroom level?
We know that when you have any team where you have multiple approaches, ways of thinking, and perspectives, you are going to get better balance. You get better outcomes around governance, risk and running the business.
Rarely now does anyone ask me why it is better to have more women on boards. We have won that argument; everybody understands why. I think the issue with race is people recognise we need more leaders of colour, but few organisations know how to address it and it is quite a sensitive thing to talk about.
How has the conversation changed around racial diversity since you began working?
Years ago when I first started work, it was more common for people to say to me things like: 'Do your parents speak English?', 'Were you born here?', and 'Where do you really come from?' No one says those things anymore, but it does not mean that attitude is not still there.
A lot of young BAME [black, Asian and minority ethnic] leaders we spoke to said there is heightened sensitivity to the point that people are so nervous they just will not speak about race now.
And that is not a good thing. It is better to make a mistake and for you to ask me an awkward question, and at least for us to start a conversation, than say nothing at all.
Do companies have a bigger role to play in promoting diversity than the education system?
Companies have an important part to play, because that is where some of the key decisions around how people progress are made.
In the context of this research, it was important to focus on the role of organisations, how they make some of those promotion and hiring decisions, and how they spot talent and move people through sponsorship.
When we did our research we interviewed leaders of colour and a lot of them talked about what had happened to them along the way. You might have the same level of education as somebody else, but you will not necessarily graduate with such a high result.
Often if you have come from a minority background, you have had to pay for yourself through school, and are probably working the whole way through, which means you may not have 100% focus.
What organisations have started looking at is, after seven or eight years of work experience, how critical it was to show all those university or undergraduate results to the leaders making selection decisions. They took them off application forms and what they found is those leaders did just as well, if not better.
Do students' choices of university and subject of study affect the proportion of ethnic minorities in different industries?
If you look at the people that study maths and computer science at undergraduate level, it is predominantly Asians. There is a predisposition to going to study those subjects in the first place.
If you are a first or second generation immigrant, as I am, the only thing you are taught is that education is the only way out; you have to do really well. You are brainwashed to study sciences. Anything to do with humanities is considered somehow secondary or lesser.
When we talk to some of the young black leaders who are successful in organisations, they were saying it was almost by some form of accident that they ended up where they are.
This was because they were perhaps the only person in their family to go to university – it was not because it was naturally obvious to them where they should go and study.
This year, for the first time at Oxford there are more black students than there are students from Eton. But it has taken several years of social engineering to make that shift.
I have led lots of global graduate programmes. We used to actively go to things like ethnic minority recruitment fairs around the country and go talk to the young BAME networks at universities so we could encourage undergraduates to consider financial services.
But it was not a natural choice. They would often say they look up at the top of their companies and do not see anybody like them, so that is not where they are going to end up.
You say a lack of ethnic minority role models is an issue. Should ethnic minorities be encouraged to look to those outside their background as role models, or should companies do more to promote role models from minority backgrounds?
If you have someone that you cannot identify with or who does not understand who you are, it is hard to connect with them.
There were some interesting comments in the research. What we picked up is a sense that you do adapt to a degree. You fit in. To be successful you almost learn to whitewash yourself.
If you get your top 100 leaders together, look around the room and there is not one leader of colour, what are you going to do about that? Maybe you have to reach two levels down in the organisation and pull people through.
Some organisations do not have meetings by level; they do 'diagonal slices' [include employees from multiple different levels in a meeting].
If the professional services firms have only just got their BAME intake to a certain level at the graduate stage, might the lack of diverse leaders just be a legacy issue?
You would hope so, yes. But it is not that there was a complete absence of any leaders of colour joining in the past. The numbers were smaller, but were there.
I have been working for 30 years and I still walk into rooms where I am the only non-white person. It is not unusual, particularly at events with very senior people, such as board members. The higher you go up the tree the less people of colour there are.
The financial industry in London has a diverse, international staff, but that did not stop groupthink entrenching itself, leading to the global financial crash. How would you respond to that?
Those financial leaders are mostly international. If you look at the top of many banks, many of the leaders of colour who run them are not British citizens.
I think it is great we have that diversity: lots of European leaders here, people from all around the world. London is a global hub for finance. But there were also a lot of people that thought the same way.
Instead, I am talking about people who were born here, went to school here. The kids around this area growing up in Bethnal Green or in Shoreditch, or in Bradford or in Manchester or Leeds. What chance have they got of going to the top of organisations?
Is there a distinction between ethnic diversity and national diversity then?
If you are a middle-class northern European or southern European you are probably experiencing the same as a middle-class, well-educated white man from London.
If you look at big cities like London, if you look at people that do not fall into that social category, often a large percentage are from BAME backgrounds. If you think of this like a Venn diagram [of poverty and minorities], at the centre you have a large proportion of people who are marginalised, disadvantaged, and have not had access to the same opportunity.
Would an ethnically-diverse, privately-educated leadership have very similar groupthink problems to an entirely white privately-educated leadership?
I went to private school, but my experience growing up at private school was very different to every other girl in my class. I was the only Asian person and nobody was struggling like my parents were. So frankly it is not the same experience.
You might be there, but you are definitely not having the same experience as everybody else, with the social cues you are learning from your family about how to fit in and navigate through the world.
Take something as simple as getting access to an internship or work experience. If your parents do not have that network and do not know how to work it, you can go to a private school and still not access those opportunities.
However, I think there are some similarities of outlook. If you have second or third-generation immigrant children who are at private school and are well educated, their world and their life, to a degree, becomes no different to the white children they are growing up with.
So is the business case for diversity solely about cognitive diversity and thinking differently?
The cognitive diversity is an important part of it. But in a market that is increasingly global, if you have got a diverse customer base and your company that does not reflect that, it is problematic.
You have to make decisions around products, around services, around communications, about what your website looks like, about how you talk to your future talent pool – surely you need some reflection of the customer base you are serving? For many organisations that is what is driving this push for better diversity.
So as a company leader, should your diversity be gauged towards what markets you are serving or your talent pools?
You have to start with your market because organisations are in the business of being financially viable, commercial, and making a profit for their shareholders. A lot of organisations such as financial services in London with hubs in Scotland struggle with diverse hiring. They can only hire from the local market that is there.
The issue is about ensuring that you are looking as broadly as possible and drawing from those untapped talent pools rather than just fishing in the normal ponds. Then in your organisation it is about ensuring the systems are fair and transparent to make sure the best people are rising to the top.
What is your view on targets and quotas?
We are not advocating quotas. We do not think that is the right direction. If you look at what happened in South Africa where quotas were put in place, there was a lot of bad feeling that people without the skills were put into jobs.
I do think targets are helpful. If you do not know what the numbers are in your business, you have no sense of where you are at. The process of setting targets leads you to enquire what is happening in your own business.
The first thing we are encouraging organisations to do is go away and work out what the numbers are at each level for BAME representation, for the overall employee population and level-by-level, and where are people not moving through.
That starts to prompt the question: 'How are we going to fix that?' We might need to ensure that we do not have all white male panels on interview committees; to put pressure on our search partners to look more broadly; or to talk to the people currently in the organisation to understand why they are not putting themselves forward.
Do you think there is any business case to be made for non-diverse leadership? Are there any downsides to promoting diversity?
No, in my perspective, absolutely not.
There might be other people who might argue otherwise. If you are someone who has never had any sense of disadvantage and suddenly you see other groups being promoted and pushed forward, you might feel personally marginalised.
What about cultural fit and social cohesion, which most businesses see as an advantage?
For many years, that is what organisations prioritised. But those cultures have become cults. Everyone thinks the same, acts the same, they do not welcome any difference from the outside, and those businesses are often at risk.
But if you ask millennials, that is not a place where they want to work. Most business leaders have recognised this and are now saying, if I am to get the best talent in the future, I have to engage with the population that are leaving university with a totally different perspective on the world of work.
It is a different perspective in terms of how long they will work, the kind of work they will want to do, what they want to wear to work, and where they want to work.
Interview by Jimmy Nicholls, deputy editor of Governance and Compliance
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