With gender equality issues and pay transparency at the top of politician’s and policy maker’s agendas - from Christine Lagarde to the European Parliament – ACCA (the Association of Chartered Certified Accountants) publishes a briefing paper that aims to help CFOs, senior finance professionals and HR professionals working alongside finance teams to understand the value of gender diversity and make the business case for diversity to their peers.
The report – Increasing gender diversity to boost performance - says that many barriers still exist to achieving more equal representation of women, and other social groups, in senior management positions. These hurdles include lack of commitment to diversity initiatives around the business, pressure to focus on short-term financial results and lack of investment in training and mentoring.
Calling for these barriers to be removed, Helen Brand OBE, chief executive of ACCA, says: “The report offers four fundamental rules for diversity and inclusion – and the foundation stone of these is the need to establish the business case. Get this wrong and you damage the organisation’s bottom line, and its public reputation.
“The ultimate aim with diversity and inclusion polices is to create an environment where everyone can achieve their potential and organisations can reap all the benefits associated with a more diverse workforce.”
ACCA says that CFOs and their finance teams should be doing the following to achieve real diversity:
1. Establish the business case
· Incorporate increased shareholder value (eg through increased sales achieved by reaching a wider customer base), wider stakeholder value (including greater employee satisfaction) and a strengthened global value chain.
· Include the downside risks of poor diversity (such as lost business, poor decision-making or regulatory costs).
· Tailor your business case to the needs and interests of other senior executives to achieve maximum buy-in.
2. Set Targets and KPIs
· Set challenging targets for diversity: 40% of senior roles to be filled by women, for example.
· Analyse financial and other data to establish links between diversity and performance.
· Identify both hard (eg gender headcounts) and soft (eg employee satisfaction) diversity measures.
3. Manage Diversity
· Establish systems, processes and a culture that enable the expression of differing viewpoints.
· Provide training in how to work effectively in diverse groups.
· Set out clear progression criteria based on performance and potential.
· Establish sound governance around diversity actions, for example, by including diversity KPIs in management reporting packs.
· Set realistic expectations for diversity initiatives: ‘quick wins’ are unlikely.
4. Be Transparent
· Report internally on diversity targets and measure performance against them.
· Meet investor and regulator needs by reporting diversity information externally.
Helen Brand concludes: “The fact these barriers to diversity and inclusion still exist in the 21st century is baffling. According to Credit Suisse Research Institute, in 3,000 companies globally, only12.9% are female CEOs and direct reports. Change is long overdue and I am glad that the accountancy profession is playing a part in that transformation.”