The trust gap and diversity

For the past 20 years I’ve been working with organisational leadership, assessing and helping businesses select leaders. Although as a partner I am insulated from the same pressures faced by the boards I support, it’s clear that the idea of stewardship and the governance that protects organisations has rarely been under so much strain.

Forgetting globalisation, disruptive technologies, changing customer demographics and a constantly developing regulatory framework, businesses are now held accountable as to how they behave.

They are judged or tested on dimensions like environmental capital, social value, purpose, CSR and—most frighteningly for many of my customers—diversity.

Why? Who knows?

Today’s stewardship requirements hold a business requirement to protect trust in an organisation’s integrity and purpose, in the prying eyes of internal and external stakeholders. But as businesses themselves have become a target of (social) media, those prying eyes become limitless and uninterested in the same financial and fiduciary pressures boards are used to being held accountable for.

Today many organisations are uncomfortable with where they stand on diversity and inclusion (D&I). Not what their well-practised narrative is, but on the risk or benefit investments in D&I can bring to on evolving business case.

There are well-made business arguments around avoiding future obsolescence; talent arguments around increasing choice and innovation through wider cognitive diversity; and customer segmentation-driven & EBIT arguments around first-mover advantage in product development. Those are just some of the things people are bombarded with by “issue entrepreneurs” selling fear and uncertainty.

This is creating the trust gap, which is part of the diversity deficit organisations are now starting to measure.

What is more clear is that as organisations have now developed a more sophisticated approach to their narrative on D&I, unfortunately in most places the experiences of staff and customers will take time to catch up. This is creating the trust gap, which is part of the diversity deficit organisations are now starting to measure.

When working with non-executive directors on this topic, I often help them to frame this with the board by asking them to consider the following questions:

Why is this important to us?
Do we have any accurate data benchmarked against proportionality of internal talent?
Is our purpose as an organisation impacted by our ability to leverage D&I for talent or customer insight?
Do we have a plan to leverage concordance?
Does our board governance extend to stewardship or trust in our diversity narrative, and if so, how many of us would be comfortable speaking about it publicly?
Is there accountability of our community groups? What purpose do they think they serve for the organisation?
Do we advocate proportionality internally and how is that governed?
Does our supply chain support strengthening our current areas of weaknesses?
Where do we compare against our FTSE 100 industry equivalents or direct competitors for talent?
Do we have a board dashboard measuring a strategy that is believed and independently validated?

I’m told that challenges like these are difficult to respond to. To which I respond: if you don’t start the process of modernising leadership to the requirements of the future, will you still be relevant? Besides, shaping the future is much more interesting than trying to replicate the past.

Raj Tulsiani is co-founder and chief executive of Green Park Interim and Executive Search.