In particular, the study on board diversity and effectiveness found that FTSE 350 organisations with at least one woman on their board enjoyed higher levels of EBITDA margin after three years, witnessed higher stock returns and were less likely to experience shareholder dissent.
For Sharron Gunn, ICAEW’s Chief Operating Officer, the news is no surprise. The strategic importance of equitable and inclusive business and the objective of strengthening the profession by attracting talent and building diversity is a cornerstone of ICAEW’s current 10-year strategy to support members and society. “Having that board-level buy-in is really important,” Gunn says. “Diversity can’t be something that you do on the side.”
Gunn also accepts that DEI is a journey and different organisations are at different points in terms of where they are what they’re trying to achieve, The murder of George Floyd was definitely a turning point, Gunn believes, opening many people’s eyes to the extent of injustices and facilitating conversations about inequality in all its guises that previously would have felt simply too uncomfortable.
“Things have really accelerated recently and we have to see that as a positive. People started talking about their own journeys and experiences in a way that shocked me because often I had no idea what they were going through. I think it’s something that we all feel comfortable talking about now, where even a couple of years ago people were frightened to have the conversations. That’s a huge step forward.”
Whatever the difference – including gender, ethnicity, sexual orientation, social mobility, neurodiversity – the pandemic has also helped nurture a more authentic style of leadership that has allowed individuals to feel more able to bring themselves to work, Gunn agrees.
“There’s a lot of commonality of experiences in terms of people feeling on their own and not having role models. With gender, it tended to be women talking about it and I’m not sure there were many men joining in the conversation, but now there are a lot more people talking about all aspects of D&I. It feels a lot more open than it was in the past,” Gunn says.
ICAEW is taking the lead on helping the profession to embrace the values that form such a core part of its strategy; the Institute is a signatory to the Women in Finance Charter with a commitment to building a more balanced and fairer financial services industry. As a proud signatory to the Black Talent Charter, ICAEW’s objective wasn’t simply to promote the concept to member firms but also to make a public commitment to meaningful progress on the promotion of black talent internally. ICAEW was also a key architect of RISE, a pilot programme to offer skills development to pupils in low-income areas and social mobility cold spots of the UK.
This isn’t just about doing what’s ethically right, Gunn argues. “You have to represent the society that you work for.” As diversity data on ICAEW membership will become mandatory later this year, Gunn says the starting point for any action relies on understanding what you look like. You can’t move the dial on this until you know where you are, she says.
The importance of data to underpin DEI strategies is increasingly apparent, and the opportunities for accountants to be driving forces for change are enormous. “As accountants, it’s about getting the data.” It’s a sentiment reiterated in the FRC research, which lays bare the correlation between board diversity and better future financial performance among the FTSE 350, and stresses the need for regulators and companies to focus on collecting more data on the types of diversity, board dynamics and social inclusion.
Gunn says her own personal journey has illustrated all too well the positive impact of diversity on business. “For me, things have changed a lot. When I first got appointed to the ICAEW Board I was the only woman and my experience changed significantly when two other women joined; The conversations changed, the challenges changed and that was a really great experience.” Fifty per cent of ICAEW’s Board is now female, including CFO Dabinder Hutchinson, who was appointed in 2020.
Progress on diversity across business is undeniable, but Gunn isn’t complacent and accepts we need to go further. “From an ICAEW perspective and my own personal perspective things have changed hugely over the past 10 years, but we have reached a point, we need another push, we haven’t reached our destination.
And for further progress to be meaningful Gunn is adamant this can’t be about tokenism, quotas or box-ticking. “When we’re not having to measure this anymore, and we live in a society that is equal and doesn’t discriminate and business is based on talent in all its guises – that will be my measure of success.”
ICAEW’s Diversity and Inclusion hub brings together timely resources on regulation and equality, along with our latest insights into diversity in the profession.