Rethinking Leadership: The Importance Of A Diverse & Inclusive Culture
Teresa Boughey, one of the expert speaker hosts of the Leadership Hub at the Future of Work Festival, reflects on the importance of diversity, equity and inclusion (DEI) and environmental, social and governance (ESG) as boardrooms respond to change and talent shortages.
30 June 2022
The barometer of effective business management has shifted significantly since the pandemic. People, Planet, and Purpose have risen sharply into focus, and it was certainly a lively topic for discussion within one of the leadership hubs at the recent Future of Work Festival. Companies are starting to recognise the impact that a diverse and inclusive culture has, not just when it comes to business innovation and profitability, but also on team morale. When an inclusive approach is lacking, it may signal deficiencies in respect of the underlying culture and leadership of the organisation.The environmental climate change crisis is also no longer considered to be the responsibility of a minority of social activists. Leaders are feeling the weight of the generational responsibility they shoulder as they embark upon the quest to save energy by achieving net zero against a backdrop of financial challenges. Consumers are demanding more sustainable products and services and are using their purchasing decisions to send messages to organisations that are lagging behind. Employees want to be part of something that enables them to have a greater impact on wider society and are therefore choosing where to work based on a company’s impact and core values.Social accountability is at an all-time high as we emerge from the pandemic into a truly altered economic landscape and robust governance has never been more essential to promote accountability, effective decision making, and sustain the trust of stakeholders.It is therefore unsurprising that environmental, social and governance (ESG) as well as diversity, equity, and inclusion considerations have risen to the top of the boardroom agenda. The dichotomy for many leaders however is maintaining the focus and momentum of such initiatives when other perceived, more important, business priorities continue to take over quarter after quarter. Not only does this hinder an organisation’s ability to progress on these important strategic priorities, but failing to connect pledges to results also creates cognitive dissonance across an organisation.
HERE ARE FOUR STEPS AN ORGANISATION CAN TAKE:
1. MISSION AND PURPOSEYour approach to creating a culture of inclusion and sustainability, as well as social impact, all starts with your mission and purpose. Revisiting these as we emerge into a very different economic landscape is important.Take the time to define what is truly unique about your company and how it can change the world through its business processes.Remember your company’s purpose should not just be purely about financial returns, but also should be a clear statement of how the company intends to deliver a positive environmental and social impact.2. FIT FOR PURPOSE LEADERSHIP
Do your board and senior leaders have the skills, knowhow and commitment to DEI and ESG, including (but not limited to) the transition to net zero for example?Where this is considered lacking explore what steps you need to take in order to upskill your capability. This can be through board training, working with trusted strategic partners, and/or changes to board composition. What is important is to understand your current capability and take action to remedy the situation.3. GOVERNANCE
Linked with fit-for-purpose leadership is governance. Governance should be regularly reviewed and adjusted if you want any change to last and not be dependent on one or two committed individuals.Governance reporting is also becoming more commonplace and is only set to intensify as governments and regulators are stepping up and playing an active role in steering both the public and private sectors through regulations, incentives and penalties.4. METRICS
The last thing is the metrics. Begin with the end in mind when it comes to designing your roadmap. Weaving metrics and incentives into this roadmap will ensure focus and accountability, but also aid momentum.
CONCLUSION
Organisations are increasingly tuning into how fragile our planet is becoming, and environmental issues are now becoming top of the leadership agenda. Whilst leaders plot the direction of strategic travel for an organisation it’s important for them to remember that they play a vital role in setting the tone and role modeling behaviors.Through the pandemic, we have seen a shift from top-down command and control toward more inclusive leadership. People want to follow authentic leaders. These are leaders who know and recognise the value of unique differences and human connection. Leaders who know the importance of being courageous and becoming activists when it comes to translating pledges into purposeful action.Organisations should move beyond considering key areas such as environment and inclusion efforts to be stand-alone and tokenistic, but to recognise the beneficial impact that can be achieved for their people, their customers, and wider society when environment, social, and governance (ESG) in conjunction with their diversity, equity & inclusion (DEI) are at the heart of an organisation.Businesses with weak performances concerning diversity, equality, and inclusion as well as ESG can be viewed as a red flag for customers, investors, and stakeholders as this often signals that the company’s purpose is not well-aligned with the interests of the wider society. As a consequence, it can bring a business’s long-term sustainability into question. Conversely, when an organisation has a strong ESG profile, combined with a culture of inclusion it can enhance its brand and reputation and therefore gain a competitive advantage. Those who lead the way will become more attractive to potential investors, lenders, employees, and customers, and as such safeguard their long-term sustainability.Join Teresa on the 13th September for her Tick-Box to Transformation Accelerating Inclusion Masterclass, find out more on our website
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