Yes, we do need to keep talking about transformation in the boardroom (Fin24)

Underrepresentation across organisational functions in terms of gender, age, race, sexuality, disability, skills and experience can not only deter talented people from seeking corporate careers, but is also a missed business opportunity.

The corporate world is evolving rapidly, and as a result it increasingly demands new capabilities and a diverse workforce.

Diversity in our teams in terms of skills and ways of thinking enhances our ability as professionals to deliver strategic value. Against the backdrop of the digital revolution, this is only becoming more important.

As a finance professional I have witnessed how the finance function has shifted exponentially and fundamentally, especially over the past couple of years. It is becoming more strategic, and less transactional.

It is expected to deliver insights, not just information and it is expected to play a leading, visible role in an organisation, and not simply to operate quietly in the background.

This new function requires a new set of technical, business and (as important) soft skills and people from various backgrounds to encourage diversity of thought.

In our profession we are no longer expected only to crunch the numbers.

In fact, that responsibility is going to be increasingly taken over by Artificial Intelligence. Instead, finance professionals are going to need to be able to interpret and analyse results, and then communicate that analysis to the rest of the organisation.

Crucially, they’re going to have to stand on an organisational stage and make effective arguments that need to be heard and understood across the board. They need to be persuasive, and that requires emotional intelligence, communication and interpersonal skills. That’s why the PWC CEO survey found that nearly 80% of Financial Services industry leaders are looking for a broader range of skills when recruiting now than in the past.

Why is the diversity dividend not enough of an incentive?

We have all read the stats about how diverse and inclusive firms tend to outperform those firms which do not prioritise diversity in terms of profit margin and cash flow generation (Wall Street Journal article – The business case for more diversity). When PWC interviewed 410 financial services CEOs across 62 countries, they found that 85% of CEOs believed that diversity enhanced business performance, 80% believed it strengthened brands and reputations, and 79% believed that it increased their businesses’ ability to innovate. The simple fact remains that the employees of a company should represent the demographics of the country and the many identities that make up those demographics.

Yet we find ourselves still advocating for diversity in boardrooms. Why is that – what levers are we not pulling to ensure fair and diverse representation?

I have heard the argument before that diversity in terms of skills and representation, including in South Africa, can be difficult to achieve, given our constrained job market and limited availability of some key skills.

In my experience the solution to scarce skills and a lack of transformation is twofold, requiring a commitment to diversity led through visible change from the top, and to the nurturing and development of talent within organisations.

Adopting an effective diversity strategy is made more difficult by systematic, institutionalised and unconscious blind spots and biases. We need to consciously challenge these biases, and that process needs to be led from the top. To create the buy-in and momentum within the organisation needed to make diversity a reality, it is important for the board and executive to motivate for its importance, and to show their commitment through action.

Deloitte research in 2019 found, for example, that “[e]ach woman added to the C-suite of financial services firms resulted in a three-fold increase of women in senior leadership positions at these companies.” The example has to be set at the top.

The need for inclusive leaders

We recently held a workshop on social cohesion for EOH employees led by Nene Molefi, a thought leader in diversity & inclusion, values driven leadership & transformation. One of my key takeaways from that session was that inclusive leaders not only probe and invite feedback, they also prioritise inspiring and multiplying of talent.

Effective transformation strategies need to be closely aligned to internal, organic talent pipeline management strategies. We need to identify and develop our next generation of leaders from within our own ranks, starting at entry level.

This also means that talent needs to be retained throughout their careers, which requires a commitment to developing supportive, enabling and desirable cultures and incentives. It is also very important that our approach to recruitment is aligned to actively promoting diversity and inclusion.

At EOH, for example, we have signed up for the United Nations Women Empowerment Principles (WEPs) and the southern African chapter of the 30% Club as part of our support of gender diversity and equality for all. Established by UN Global Compact and UN Women, the WEPs are informed by international labour and human rights standards and grounded in the recognition that businesses have a stake in, and a responsibility for, gender equality and women’s empowerment. The 30% Club is driving a global mission of ensuring at least 30% representation of women on boards and C-suites globally.

Moving forward

We can all agree that in South Africa, gender and racial representation, particularly at board and C-suite level, is not yet where it ought to be. This is true from an ethical and societal standpoint, but also from a business standpoint.

Diversity in terms of gender, race, culture and skills can contribute to organisational value creation – with the added benefit that businesses that are committed to transformation stand to profit from the diversity dividend.

Concrete examples of action organisations can take – which EOH has done – include diversity and inclusion policies, and tackling important issues around gender-based violence, diversity and Black Lives Matter in open forums.

Commit to fostering a truly inclusive culture, one that embraces everyone who can reach their full potential to positively impact their people, clients and communities.

As South Africans, we can all make a real difference toward eradicating racism and discrimination in the world, and especially in our own country.

Megan Pydigadu is Chief Financial Officer at EOH. Views expressed are her own.