Are nominations committees focussing on all aspects of diversity to create equal opportunities for talented people to succeed?
Core to the nomination committee role is ensuring that the board has the right combination of skills, backgrounds, experiences, and perspectives to probe and challenge management's strategic assumptions and to support management in navigating the company through an increasingly volatile and fast-paced global environment.
Our recent Global CEO survey found that whilst businesses are navigating an unpredictable economic landscape, they are continuing to prioritise their people. Organisations are focusing on their employee value proposition to attract and retain necessary talent as a top operational priority to achieving 3-year growth objectives. In addition, there is greater focus on the social aspect of ESG, with 68 percent of CEO’s believing that progress on inclusion, diversity, and equity (IDE) has been too slow, and 73 percent believe that scrutiny of IDE performance will continue to increase over the next 3 years.
In recent years the IDE space has been a priority area in most organisations and over the past decade, there has quite rightly been a focus and momentum in examining ethnicity and gender traits, however one dimension of diversity that has been historically understudied is socio-economic background – particularly in the context of boards.
An unlevel playing field
We, in the Board Leadership Centre, wanted to explore this complex area in more detail and our survey examined how much is known about the socio-economic background of board members and how it is considered by boards during succession planning and recruitment.
- Only 15 percent of respondents come from working class backgrounds compared to 70 percent who came from professional background.
In contrast 37 percent of today’s UK’s working population come from a professional background, 24 percent from an intermediate background and 39 percent from a working-class background. Our results suggest both a lack of social mobility and lack of low socio-economic background representation in the boardroom.
In short, rather than the roughly 50:50 split reflecting society at large, those from professional backgrounds outweigh those from lower socio-economic backgrounds by over four to one.
Boards are currently not prioritising socio-economic diversity, and nomination committees are not considering it in succession planning:
- 84 percent of respondents said that their boards are not measuring the socio-economic background of board members, and 69 percent said that their nomination committees were not addressing it during succession planning – suggesting a lack of prioritisation compared to other diversity traits.
- Almost all respondents (92 percent) said that they were not asked about their socio-economic background in their recruitment process.
Access a wider range of talent
By removing barriers that prevent talent from less advantaged backgrounds reaching the boardroom, boards have the potential to gain better diversity of thought and understanding of customer as well as employee experiences and perspectives. It also bolsters an employer’s ability to remain attractive, helping support sustainable business growth.
I think that improvements to social mobility throughout the organisation can not only help level the playing field but also, to take an intersectional view, potentially improve representation of other diversity traits at the same time too.
The current uncertain economic environment presents a myriad of challenges that businesses need to overcome. Efforts to increase social mobility could be the key to unlocking and accessing the widest range talent so boards will be better equipped to navigate and succeed through turbulent times.
Read the full ‘Uncovering social mobility in the boardroom’ survey here:
