There is much work to be done in making Boardrooms more diverse. The importance of investing in mid-tier talent in achieving this cannot be understated.
One of the first documents I read when I started my career in executive search was the report “Women on Boards” by Lord Davies. This report highlighted the stark reality of the time: that women were underrepresented on the Boards of FTSE 250 businesses.
To achieve more equity, the Report recommended setting a target: 25% of women to appear on FTSE 100 Boards by 2015. Fast-forward twelve years, and the total number of women on FTSE 250 Boards is now around 38%, which is remarkable progress. But there is more to be done.
Ethnic diversity on boards
In 2015 the Parker Review set out ambitious targets. The aim was to achieve at least one ethnically diverse member of the Board of FTSE 100 organisations by 2021 and within the FTSE 250 by 2024. Last year, the Review posted an update. 89% of the FTSE 100 has achieved the Parker Review target and 55% of the FTSE currently meet the 2024 target.
In fact, 16% of all FTSE 100 board positions are held by ethnic minority directors (164 out of 1,056 director positions). Demographically, this is in proportion to the latest census, as BAME (Black, Asian or ethnic minority) people represent around 13% of the UK population.
However, other sectors face their own challenges. For example, in the Higher Education sector, 20% of Boards do not have a BAME member in their governing body. In the NHS, 41% of Non-Executive Directors (NEDs) are women, and 37% are female Chairs. But Black, Asian and ethnic minority people account for 5% of the total Chair population, with only marginally better figures for BAME NEDs – 10%.
It's therefore clear there’s a long way to go before we achieve true equity in the boardroom, across multiple sectors. It’s also important to note that diversity as a concept is more expansive than sex or ethnicity. Protected characteristics include disability, sexuality, age, social background, and there are others.
Organisations are increasingly seeking candidates from a wider range of backgrounds. This is to provide diversity of thought within the Boardroom, as well as to more closely reflect the communities they serve. So, when we aspire to find a diverse range of candidates for our clients, it always pays to be as broad as possible.
How to address the problem and develop internal talent
There are two ways to increase diversity in senior leadership teams. One way is to search the external market and appoint. Another way is to invest in diverse internal talent earlier on in people’s careers, so when they reach the tipping point for promotion, they are ready. Both require very different approaches.
When search firms engage in mapping external market roles, one question they ask clients during the briefing stage is: “Is there an internal candidate for this role?” The answer can be revealing. Organisations with strong internal candidates for promotions appear to have a meritocratic culture. This includes clearly defined routes of progression, where people feel encouraged and supported to develop their careers as part of a long-term succession development plan.
There is a direct correlation between how organisations invest in and develop their internal talent, and how successful they are in hiring for senior leadership teams. Being aware of unconscious bias and investing in training to counteract this is also helpful. The first step is recognising it exists; we all have inherent biases. By being aware of these biases, allows us to be brave and bold in decision-making. And because of the need to improve diversity in the Boardroom, there needs to be a more brave and bold approach to selecting diverse middle managers.
The role of search firms is to help address the problem and assess internal talent
Today, search firms have a big part to play in ensuring more diverse leadership teams, regardless of sector. Some organisations are currently addressing diversity issues through the development of a formal framework and by working with search firms to improve diversity. This involves recognising the role they play in identifying and attracting external diverse candidates. We do this at Teare Executive Search, but we also work with our clients to assess their mid-level leader cohort, who are being assessed for promotion.
Here are the benefits of using our executive search approach:
We have recently introduced an external competency framework, which we use to ask questions at interview
Using independent head-hunters allows for an objective assessment at interview and removes any inference of bias
We provide objective and independent feedback to unsuccessful candidates on their application and their interview performance
We provide unconscious bias training to make decision-making as impartial as possible.
The role of individuals in addressing the problem
There is a clear link between ensuring diversity within the appointment process and having a wide candidate pool to search. Put simply, the smaller the pool, the harder it is to find people. As a result, it’s in the candidates’ best interests to plan their own career progression.
Here are some key tips for diverse candidates:
Be proud of what makes you “you” and find organisations which have an inclusive culture. There are many external benchmarks which organisations now use to showcase their credentials in making their workforces more diverse.
Find out where you want to go in the organisation and seek responsibility for delivering in that area.
Focus on high performance and meeting your KPIs.
Join affinity groups.
Invest in coaching and mentoring to support you in your development. Leadership is challenging and you will find out more about yourself through effective coaching.
Read widely on the topic of leadership and be clear about your needs and boundaries – this will lead to greater respect from your peers and managers and enhance your leadership credentials.
Join external professional networks and seek best practice from other sources. This will go some way to nullify the perceived benefits that external candidates bring.
These are just a few tips we give to people who come to us asking how they can achieve promotion. By having a clear sense of direction and purpose and putting yourself into the candidate pool means you will be easier to find, which makes our job easier!
If you have any questions, or would like to understand how Teare Executive Search can help your organisation including executive search, talent benchmarking or unconscious bias training, please get in touch.
Mandy Turpin, Director, Teare Executive Search on 01625 315 017 or via email mandy.turpin@teareexec.com
