Three decades ago, 80 per cent of an organisation’s value was based on physical assets and 20 per cent on the intellectual assets. Today that has reversed.
Human capital is fundamental to success. It has been proven that organisations with diversity in their culture perform better. It follows that commercial success is positively influenced by driving diversity – whether that is gender, ethnic, age or disability.
However, it seems that diversity is often treated as a compliance matter – a tick-box exercise rather than core business strategy.
To effect real change, we have to identify relevant metrics and then track them effectively, to get a picture of the culture of an organisation, how it works and how it treats its people.
Shining a spotlight on such things might be difficult, but it is not impossible. A welcome move is the new government charter designed to improve gender diversity in senior positions within the banking sector.
Developed from a review led by Virgin Money’s Jayne-Anne Gadhia, it recommends that the remuneration packages of executive teams are connected to gender balance targets.
It also recommends that firms set targets for senior management gender diversity, publish progress reports annually against these targets, and appoint an executive solely responsible for gender, diversity and inclusion.
Several high-profile players have accepted the charter, so prospects are promising. There may be potential to replicate such commitments in other sectors.
I recently chaired an event on this topic that urged business women to lead by example. Panel member Tanya Castell from Changing the Chemistry referenced perceptions that boards are always made up of older, greying men. She underlined the need to assume shared responsibility for changing the status quo and increasing the diversity and therefore effectiveness of boards.
Ultimately it is about ensuring diversity and inclusion practices are encouraged at every level and that equality does not diminish with seniority.
The organisation has to provide a positive environment through recruitment techniques and flexible working practices, while the individual has to take responsibility by putting themselves forward.
Society is changing: the corporate cultural landscape has to as well. Performance diversity has to be more than a tick box.
• Linda Urquhart is chair of law firm Morton Fraser and co-chair of the Fair Work Convention. She recently chaired the panel event Leading by Example: Diversity in Business, co-hosted by Morton Fraser and the Institute and Faculty of Actuaries.