Arisaig Partners’ managing director Rebecca Lewis answers ESG Clarity‘s questions on what she would like to see companies adopting in 2021 from a diversity perspective, and where there may lie complacency
From a diversity perspective, what major changes could we see in 2021?
It is difficult to predict the timing of regulatory changes but there is one-way traffic on this topic and so certainly hope for more progress. Notable is that commentary has broadened across all dimensions of diversity and we have seen strong initiatives built in the finance space. Whilst gender has long been a focus in the finance industry, the lack of ethnic diversity has come to the forefront this year and this should build momentum in 2021.
Here in the UK, the 100 Black Interns programme has been a great success and we understand that it will achieve a number far higher than the stated ambition of 100 – Arisaig will be pleased to welcome two interns in 2021. If any changes from regulators it will likely be linked to improving disclosure, which we think is a good thing as transparency is critical in terms of understanding where you are today and framing progress as diversity commitments are effectively managed.
What would you like to see companies adopting?
In practical terms we think that transparency is the bedrock of any approach to diversity and inclusion. Firms should publicly disclose commitments, policies and initiatives, as well as measuring and reporting progress regularly. You can’t manage what you aren’t measuring.
In terms of trends I think we are seeing more public commitments across the board and it is an expectation now that a company doesn’t just say ‘diversity and inclusion is important’ they say ‘diversity and inclusion is important, here is how we approach it and this is the target we are going to work towards’. We would rather a company fail to meet a stretching target than no target or something benign that doesn’t really address the issue. In the emerging markets we invest in, where the awareness of diversity and equality in many places lags the developed world, we see an ever greater opportunity for companies to establish bold ambitions here. It will ultimately be these companies that will have advantageous access to the best talent in the coming years.
See also: – Outlook 2021: What’s next on the D&I agenda?
How will the Covid-19 pandemic continue to affect companies’ attitudes towards diversity?
The ambition has to be that corporates increasingly recognise that good businesses are built on strong cultures and strong cultures are built from a diverse and inclusive workplace where individuals can be their authentic selves and differences are celebrated. It should be a time to dial up diversity initiatives as companies are working hard to sustain and build cultures working remotely.
Meanwhile, at the board and senior management level, it has been proven that diverse teams are more empathetic and are therefore likely to factor in wider stakeholder interests. This ultimately leads to more resilient long-term businesses, something that the pandemic has reminded us we need more than ever.
Additionally, we are watching out to ensure that companies don’t de-prioritise D&I commitments – I don’t think this is actively happening but given the scale of other issues in a Covid world the concern is it drops off the active radar and doesn’t get the airtime it should.
Do you think we will see a change in corporate attitudes? What is driving this?
I think the main change is that there isn’t the option to stay silent anymore and have diversity and inclusion as something in the background. It is the norm now that this topic has to be thought about, understood, measured, managed is part of any senior management conversation.
Transparency – through social media – is supporting this as the difficult questions are being asked and answers need to be forthcoming. Our ongoing engagements with various boards and management teams across the emerging world continue to point in the direction of growing action around diversity and inclusion.
We believe this is driven by an awareness that taking a lead on diversity will create stronger businesses over the long term. Take India, for example, where women hold over 50% of undergraduate degrees in the country and yet represent less than 20% of the workforce. The opportunity here should be obvious for all to see.