Category: Features

Strategic benefits

These days, however, the landscape is not merely one of ‘greed is good’ and ‘may the best man win’. Increasingly, today’s companies have to show a good balance sheet aligned to ethical and fair business practices and policies which maximise their earning potential with all tenets of society. This is not only for investors and shareholders, for whom ethical and social responsibility issues are much more of a priority than previously, but for customers, who vote with their feet and wallets and for whom the power of social media can make unfair practices abundantly evident, as well as for existing and potential employees.

For our respondents and interviewees in this report, who constitute in-house lawyers and business people from a wide cross-section of leading global companies, diversity and inclusion simply makes good business sense. Internally it is about having access to the best range of talent. Externally it’s about being able to appeal to the widest customer base and reflect the personal reality of one’s customers. Both of these intersect quite heavily; Raphael Mokades, founder of Rare Recruitment, the first diversity-focused recruiter, summarises it thus:

‘There are four benefits, broadly speaking. One is the market: for example, if you are selling a hair product for black women, you wouldn’t have only white males on the team. That approach is no good, because you have to understand the market. Talent is another: if you think talent is evenly distributed and you don’t hire women, then you are missing out on 50% of the talent. Another benefit is reputational: it makes people feel good about the firm they work for, which is good for the company. It keeps people being productive and it makes people happy to procure from you, such as governments, clients and companies. The other is legal benefits, because you are much less likely to get sued by an aggrieved minority person if you can prove their being aggrieved has nothing to do with their minority status.’

Companies will express this in different ways depending on their business model and to what extent they are customer-facing versus B2B. The wider the potential customer base, the greater the imperative truly to embrace diversity. Multinational consumer goods company Unilever is a clear example of this. Its Gender Balance Plan is a key focus for the company, but the basic rationale goes back to the fundamentals of what the company does. As general counsel, Ritva Sotomaa explains: ‘Two billion people use our products every day but women are our main consumers as, in regards to our products, the majority of the buying decisions are made by women. It is business sense to make sure we reflect that.’

or media company ITV, the strategic imperatives have been there for a long time. As one of the main TV channels in the UK, there’s an imperative to reflect the cultural diversity of the UK. But for a number of years, media companies like ITV have also been trying to combat the perception of the media in general as a playground for the rich and privileged.

‘It was really like pushing an open door,’ explains legal director Barry Matthews, ‘because we are progressive in the field of diversity as a matter of course.’ Matthews has been instrumental in setting up the Legal Social Mobility Partnership (LSMP), an initiative which promotes social diversity and opportunities for less-privileged students to access careers in law and this fits in nicely with other initiatives already underway at ITV. ‘There has been the criticism of the media for a number of years that it is filled with those who can afford to intern for free. We have an award-winning apprenticeship programme across all of our business areas and have committed to diversity across the piece through our social partnership initiative and commitment to the living wage. Hence when we started the LSMP, there was already a strategic will to promote diversity.’

Diversity also has a solid strategic case from a legal point of view, as Michael Coates, head of UK legal at Shell, told us ‘The legal issues Shell comes up against cut across legal systems and jurisdictions, so we need people to understand how these systems operate over multiple countries. Having diversity… is a clear business driver for us.’

Part of what this means is taking diversity and inclusion away from the notion of ‘being nice’ and giving it some teeth that makes the stakes higher. For our interviewees focused on initiatives, what was driving their companies’ involvement was the fact it could come down to basic key performance indicators and profit and loss, as well as market perception. Those key issues for 21st century businesses make diversity and inclusion a fundamental issue and can therefore drive top-level engagement, which all interviewees agreed was pivotal to truly ensure the success of initiatives.

For Tim Hailes, Managing Director at J.P. Morgan and a long-time advocate of LGBT issues, this is the key driver for his own efforts and that of the banks.

‘I am keen to ensure that we focus on the fact that we firmly contextualise this in work, about the success of the bank, to help people fully contribute and succeed in their jobs, attracting talent; it is not about being especially “nice” to gay people or supporting worthy causes that have little to do with the day job. There are many things out there that people can support in their own time, but where this has a material impact for J.P. Morgan is in the context of the business.’

And that is not merely reflecting the reality of their consumer base, but increasingly for companies, it is about doing things differently and innovatively. To do that, ‘group think’ definitely has to be avoided to allow diverse experiences and diverse identities to become part of a creative and innovative drive. Funke Abimbola is general counsel for UK and Ireland at pharmaceutical company Roche. In an area like pharma which constantly pushes the boundaries, diversity of thought is the end game. ‘If you have more diverse thinkers, then you will be problem solving in a very different way, across all disciplines. We are a very innovative company at Roche and the challenge is to remain innovative, because this is a crucial part of drug discovery – we need innovation at every stage and innovation only happens if people look at a problem in a different way’.

This sentiment was echoed across our interviewees and respondents to our survey. To be truly competitive, creative and innovative, companies need to avoid group think. Companies need to stay relevant and to demonstrate that relevance in a global market place which is by default diverse and not homogenous. Channel 4’s Prash Naik points to the innovative and creative benefits diversity of thought produces:

‘By recruiting from a more diverse group you will get people who think in different ways and who challenge convention. That brings different commercial opportunities and, potentially, more innovative ways of working. That has to make long-term commercial sense.’

For those who are still not convinced, research shows that more diverse companies are more profitable; even if your motives are purely Gordon Gekko-like greed, it still makes strategic sense. A 2015 McKinsey survey showed that ethnically diverse companies, were 35% more likely to out-perform against their national industry median average than non-diverse companies and gender diverse companies were 15% more likely to outperform by the same metric. (McKinsey & Company: Why Diversity Matters, 2015).

Role models

While initiatives are obvious ways for companies to show their support for diversity and inclusion and to really drive it, some might argue the open visibility of role models and successful role models are just as vital and, in some cases, may be even more important.

Successful role models can be the first sign to diverse candidates that it is possible to succeed in their chosen industry and can therefore be important in allowing candidates to act on their dreams before they may even know about the existence of particular initiatives or schemes. Role models who are authentic and for whom their own identity is indivisible from their success in their career send a powerful message.

Tim Hailes was one of the first openly gay men in investment banking in the UK. For him the power of what role models do cannot be underestimated.

‘Visible role models communicate powerfully that you can be successful and that being who you are is a non-issue.’ In J.P. Morgan this fact is very powerfully driven home by the overall group general counsel Stacey Friedman being openly gay.

The very existence of role models may not be enough if role models are not achieving success. Miranda Brawn started her career in investment banking and then trained part time to be a barrister and now works in-house for Daiwa capital. ‘For myself, being a mixed-race female with a career in a male-dominated industry has definitely been inspiring for others from diverse groups to go out and strive to have a successful career.’ She continues: ‘It is important for people to see themselves reflected in the people who make decisions and have careers in occupations that may interest them. For some people, their role model will not be a person who looks like them, it will be someone completely different who inspires them.’

Sandie Okoro, general counsel at HSBC Global Asset Management, whose identity as black, female and working class, is inspiring on many fronts, says it is about ‘telling the truth of your story.’ For Okoro it is as much a sense of being true to yourself in not putting up barriers. ‘It’s hard to succeed in legal full stop. Ultimately there are as many barriers as you put up yourself; you can put up being female and black as an excuse or use it as a weapon of defiance.’

Interestingly, for a number of our interviewees, role models were seen as better than mentors due to the inspirational edge they give in inspiring people to live their dreams. Kristin McFetridge, chief counsel, portfolio products and standards at BT, runs the telecoms company’s mentoring programme in the legal team, but personally feels that role models play an even more crucial role than mentors. ‘I think they are critical. If you gave me a choice between a mentor or a role model, I’d have a role model. I don’t think anything can come close to looking at someone and saying, “I can be that person”.’

Lesley Wan, corporate counsel at Lloyds Bank, is the only lawyer on Lloyds’ inspiring role models programme. To her, role models build the blocks to get you to the place where mentoring can begin, but crucially, it is role models which allow you to make the most important initial steps into a new challenge. This is of personal as well as professional importance:

‘You can observe their traits and characteristics and decide which of those traits or characteristics you may want to embed and adapt to suit your needs and personality as you see fit. It’s like a form of informal mentoring without necessarily being mentored, and you get to pick and choose what you want to take away with you.’

But for many, role models equate champions, and having a visible figure at the helm is integral to truly embracing a culture of diversity in a way that is more meaningful than just box-ticking.

For all of our interviewees it is gaining profile and traction within organisational leadership that are key. Indeed, as exemplified by PageGroup, Channel 4 and Unilever, what can be most important is visible champions or role models who are not diverse. The UN’s HeForShe campaign is a high-profile example of this, recognising that gender inequality affects both genders and that change cannot be effected unless those who are perceived to be part of the problem also become the solution.

However, for some, this produces a discomfort which could be described as appropriation, if, as one source commented, it just becomes about ‘the dominant groups once again giving their side of the story and leaving no room for the diverse voices.’

It seems that striking the balance between championing by non-diverse leaders and making sure there are diverse leaders to be role models needs to be the goal. This also means that companies need to ‘walk the talk’ and be seen as being authentic, which were two strong themes which came up in our interviews. The ‘box-ticking’ approach, on the other hand, is something our interviewees were all sensitive to and had first-hand experience of.

Initiatives

In our quantitive survey of 250 in-house lawyers in the UK, agile or flexible working was perceived to be the most effective tactic in increasing diversity and inclusion.

Interestingly, this is beginning to be seen as a more effective way of working for businesses overall because it is more focused on outcomes. Indeed, many of our interviewees spoke of a more outcome-focused point of view as being transformational across the business, not just for diverse employees.

Much of this is changing the way we conceptualise work. Joan C Williams argued in her 2010 book Reshaping the Work-Family Debate that there is a mismatch between the workforce and the workplace that is fuelled by out-of-date societal norms and is one that can disadvantage men as much as women. Increasingly, flexible or agile working is seen as a solution across the organisation, and not merely a panacea to working mothers.

Barclays offers ‘dynamic working’ programmes across the bank. The name itself has also been key in reflecting a focus on an outcome-based model and trying to dispense with the notion of different forms of working as a somewhat lesser variant of the accepted norm.

Indeed, companies are looking to redefine the normal in regards to working anyhow. Sandie Okoro’s London-based legal team in HSBC Asset Management works flexibly as a matter of course and in setting up the legal team it was one of the core building blocks that reflected the way the wider asset management team is working. Okoro explained to us that making this an issue for everyone, not just certain groups, was key: ‘I structured my team in such a way that everyone can work two days a week from home. Most people take up that flexibility, and men are as keen on it as the women – it helps with work/life balance issues. Interestingly, when I recruited for my team, men were very keen on flexibility and this was something they hadn’t seen elsewhere.’

Looking at work differently becomes an issue of talent management more generally and one that gels with the different way of working increasingly associated with millennials or Generation Y. It is also a part of the general realities for companies that need to cope within a global and technologically open economy where the 9-5 rules no longer apply and disaster can strike at any moment through a number of different channels.

Technology has had a transformative effect in this regard on working practices across the board. But this has obvious benefits for those with caring responsibilities, particularly parents. Early years childcare is still overwhelmingly the responsibility of women and it has therefore had a dramatic effect on women’s ability to work at all, let alone to advance within their professions. Despite more women than men entering the profession in the UK since 1993, according to The Law Society, women are still not advancing into partnership and leadership levels at law firms in anything like the same proportion.

Traditionally in-house legal teams have benefitted at a certain stage in lawyers’ careers from the ability to be more flexible around working hours. For that reason, many in-house teams have noticeably higher demographics of female lawyers, including in senior roles, than most law firms do.

The focus on different ways of working, which many of our in-house teams and the companies where they work are using, has meant that the statistics in-house for some companies are dramatically different from law firms. For many of the in-house lawyers we spoke to, this is because of the focus on outcomes not hours, as Kerry Phillip, legal director at Vodafone told us:

‘I concentrate on the output, which means where you’re doing your work is not important; what is important is what you are delivering. Vodafone’s technology really helps here because we all have laptops and we all have mobiles. We hot desk…in the UK you can print documents at any of our locations.’

This has had obvious results on who works for Phillip as she has 50% split between men and women in her team, which includes part-time workers, job sharers and remote workers. The team has had three listings in the Power Part Time run by Timewise and as she comments, ‘That’s just fantastic recognition that you can have a senior, responsible job while not working traditional full-time hours.’

Mentoring and sponsorship

In our range of interviews, mentoring is happening via both formal and informal channels to promote diversity. In fact, mentoring may be one of the easiest ways for an individual to get involved informally. In a 2010 survey for Harvard Business Review it was reported that 59% of companies that replied offered formal mentoring programmes, suggesting it is an initiative that has gained a lot of traction. It is also very impactful. A 2011 report by the Center for Work- Life Policy (CWLP) in the US stated that people who are mentored achieve more promotions, higher salaries, more career satisfaction and even report being less stressed than those who lack such guidance.

However, a number of our interviewees who were experienced mentors advise that setting definite boundaries and expectations is key in having a successful mentoring experience.

Sandie Okoro, who mentors both formally and informally, feels that it’s important to let the mentee set the pace of the relationship but to also make sure it works for the mentor. Setting out limits, such as an initial time frame for the relationship, ensures the mentoring does not become too draining.

Interestingly, she also feels that as a mentor, highlighting failures and what can be learned from these is as important as highlighting the successes:

‘You have to be as open and honest about things that didn’t work for you as much as things that have worked. What makes a success sometimes is the ability to pick yourself up and keep going on.’

Getting the match right between mentor and mentee can be one of the biggest pitfalls and something that needs care and consideration as with any significant relationship. Kristin McFetridge, who runs BT’s legal mentoring programme, told us: ‘The hardest part is matching someone with the right mentor. We’re revamping the questions we used originally, because they didn’t ask the right things and a lot of matching came down to gut feel. As a company-wide initiative we’re looking at a mentoring-matching programme, which will work like a dating app. If someone doesn’t connect with their mentor, despite all the will in the world, it will be fruitless.’

In our survey of in-house lawyers, mentoring and sponsorship were seen as less impactful than role models or championing of diversity initiatives from management. However, with sponsoring in particular, there was a high level of respondents who stated they had not seen this initiative in action. Conversely the amount of respondents who stated the importance of management buy-in and the need for targeting candidates was much higher.

Formal sponsorship seems to be less advanced in the UK than the US. However, research undertaken there by groups such as CWLP, Harvard Business School and Catalyst does suggest that sponsorship is much more effective than mentoring in producing long-term engagement and satisfaction via recognition and promotion which were often inspired by sponsorship or advocacy from more senior colleagues or managers. An interesting consideration though is whether in some cases, the championing of diversity and inclusion by senior managers and mentoring initiatives may be informally blending in the UK into something more akin to advocacy.

Networks and ally groups

Networks are used by a number of companies we interviewed to provide a tangible platform within which those groups can raise issues that are important to them and via which the company can demonstrate how serious it is about the initiatives pertaining to that group. The existence of official networks and also the related ally groups are a tangible awareness- raising tool within corporates to show that these are demographics that matters and need to have a voice.

That inclusive aspect is key to the power of networks but it is a two-way street allowing voices at the grassroots to be heard, but also showing that those who need to are listening. As Alison Gaskins at Barclays explains in regards to their very active network programmes: ‘It is not about the job title because everyone needs to feel responsible. That’s where employee networks step in, because people are deciding for themselves what works. It becomes an inclusive approach.’

The pipeline

One of the issues that many companies struggle with is ensuring the pipeline of credible diverse candidates. For many in-house teams the pipeline is still mostly private practice law firms and the issue can be trying to fix someone else’s problem. While arguably many law firms are making sterling efforts in promoting diversity and inclusion, the viewpoint from the in-house lawyers we spoke to was that it was at best a mixed bag and at worst, merely lip-service without credibility.

This means that for in-house legal teams there are two major solutions, neither of which are short on effort. Firstly, teams can try and bring on their own in-house legal trainees. This is often seen as a good way for diverse and non-traditional candidates to enter the profession. Our in-depth interviews with BT, ITV and The Guardian, all of which have legal teams of varying sizes, showed they have done this successfully. However, it still relies on the goodwill and co-operation of law firms to provide some of the training seats.

The other route is via lobbying law firms to be more proactive around their pipelines and working with them on initiatives that do that, and a number of the companies we spoke to for this report are involved in this. ITV and BT both work on the PRIME social mobility initiative alongside a number of large law firms with the aim of encouraging more social mobility in the profession.

Social mobility remains a significant issue in the UK legal profession. According to our research this is due to a range of factors, such as an inadequate pipeline of viable candidates and the issue of self-deselection from the career path before application for training contract or even before university.

There has been a habit of focusing on particular universities and grades in the selection of candidates, and traditionally most candidates who did not attend The Russell Group or Oxbridge were deselected for any law firms’ criteria automatically. Another factor has been the lack of visibility of social mobility role models. In some cases, people have had to make a tangible choice to identify as socially mobile as it may not be outwardly visible or identifiable. This issue has historically been further compounded by the fact that by the time socially mobile candidates ‘make it’ they may feel the pressure, either actual or perceived, to fit in and hide their roots.

One of the recent significant advances in this area is the adoption of contextual recruitment by many law firms to avoid the arbitrary list of diverse talent via a fixed set of criteria of grades and university choice. Instead, contextual recruitment looks more holistically at the candidate’s achievements via the context of both personal and educational factors.

A huge issue in regards to pipelines is making sure that candidates don’t self-select themselves out. As Barry Matthews of ITV comments, in the cohort of young people in the Legal Social Mobility Partnership (LSMP), a significant amount of focus has been developed to consider issues of confidence and resilience, often via the use of sports and performance psychology training.

As Matthews told us, if a socially mobile candidate is unsure of their career choice anyhow, and then receives a rejection from a training contract application, they may consider it just proof they should not pursue a career in law. A more socially affluent candidate who knows people in the legal sector will probably know that this is part of the process and just move into the next application. This is where, as pointed out by Sandie Okoro in regards to mentoring, teaching about failure is as important as teaching about success.

Any kind of change is a hard and often emotional process. There is generally a certain amount of challenge and even discomfort involved.

Continue reading “Being uncomfortable”

Most of us agree that there is a clear business case for embedding diversity and inclusion deeper in our business. It stimulates creativity, helps to meet the needs of our diverse customer base and delivers better overall performance.

Continue reading “A CEO’s perspective on diversity and inclusion”