Inclusion is a behaviour, diversity is a trait. How do boards create and cultivate an inclusive organisation?

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How can boards develop and nurture a truly inclusive organisation in a way that builds trust and a sense of belonging – and leads to success? Louise Chaplin, Head of Board Practice at Eton Bridge Partners, hosted a webinar on the subject. She was joined by:

  • Kirsty Bashforth: Chief Business Officer at Diaverum, and Non-Executive Director at PZ Cussons and Serco
  • Louis Cooper: CEO of the Non-Executive Directors’ Association

Click here to watch the full discussion.

People within an organisation expect to feel included and that they should and can be appreciated for being themselves. The topic of inclusion is having a noticeable impact on board discussions, and on the activities of both executive and non-executive directors. Inclusion is not a nice-to-have or a one-off initiative for all organisations. With diversity, it has become a core topic for boards to consider, assess and act.

Several factors have driven the elevation of inclusion to the top of board discussions in addition to this talent choice point:

  • Covid-19, with its heightened focus on the importance of staff wellbeing
  • Recent governance updates mean inclusion is required to be more formally factored into Board discussions
  • The ESG (Environment, Social and Governance) agenda and broader expectations from shareholders, other investors and media are moving the dial to ensure that inclusion is a regular part of the board focus

From an organisational perspective, inclusion, with diversity and equality, should be at the “heart of the company” and Louis emphasised the four C’s that leaders and boards must bear in mind when considering inclusion being:

  • A Catalyst activity – in terms of making inclusion important and ensuring it leads to both tangible actions and positive outcomes
  • A Change activity – so you need to be sure you are comfortable with change, and with measuring change and its impact
  • A Culture activity, which means you need to look at behaviours at every level across an organisation
  • A Communication activity – needs to be consistent and constant at every level of an organisation

The chair should lead the focus on inclusion in the boardroom working closely with the CEO, who drives the wider day-to-day company perspective. The board’s style, tone, oversight increasingly reverberates around the company ecosystem, and in holding the CEO and executive to account it is not just about discussions, but also about the way it operates

During the webinar the attendees were invited to share their view on the progress of the inclusion agenda within their organisations, which provided a fascinating insight.

  • 78% said their leadership team was setting the right tone and driving the inclusion agenda.
  • 74% said the inclusion agenda was a priority in their boardroom.
  • 78% said they felt there was an inclusive culture in their business.

The poll indicates a very positive position and a good foundation to work from. However, Kirsty observed that the inclusion agenda is not set in stone. She said: “We need to be agile and nimble. Inclusion is in the eye of the beholder, not the person declaring it. Leadership needs to understand this is not a one-off. They need to be asking, ‘Have we got our ears to the ground’? Does this align with our corporate strategy, and how does it influence the talent that we need, and the talent we can attract?’”

Kirsty went on to note that: “I have seen one company where the inclusion agenda is extensive and constantly evolving, to the point that the question is now being raised to potentially flip the focus – ‘who is being excluded and how do we avoid that?’”

As Louis observed:

The world we live in is changing, and it’s changing very quickly and if organisations don’t change, they are going to be left behind.

There needs to be a clear understanding of what the culture in an organisation actually means, which includes its impact on individuals and groups within it. The recent FRC paper on ‘Creating a Positive Culture’ highlighted and compared a range of ‘opportunities and enablers’ vs. ‘challenges and barriers’ under the headline of transparency through honesty and trust.

NEDs, given their part-time status in the company, can often feel excluded in terms of the understanding and struggle to keep up with what is going on within an organisation . This sense was exacerbated during the Covid-19 pandemic when they were unable to walk the floor and see at firsthand the culture of a company. However, this also meant that NEDs in particular had to find different ways to do this – whether that was by joining inclusion webinars as a participant or a panel member, or doing virtual visits with particular parts of the organisation.

The governance guidance in the UK, following the updates in 2018, means that every board is required to ensure the ‘employee voice’ is actively represented in the board ecosystem. There are currently a plethora of different approaches – from employee representatives on the board to a NED designated as a conduit. It is an increasingly active and proactive agenda for the board and one that is adding to the rounder understanding of how the company is performing, beyond the financials. It is important for NEDs to make sure they are seen, and a part of the operation. Some organisations, as a result of new governance frameworks, now have a designated NED to link between the board and the workforce.

A question was posed on whether there are any pitfalls in terms of leading an inclusive culture?

Kirsty said:

Inclusion is not the same as diversity. Don’t confuse the two. Just because you have a great diverse workforce, it doesn’t mean inclusion will just pop up. You have to work really, really hard at it – and it is a change management exercise if you haven’t got one now.

Perhaps counter-intuitively, Covid-19 forcing board meetings to go virtual has in some places had a positive effect on inclusion – every person is the same sized tile on a ‘Teams meeting’, and it is much harder to dominate or disappear from a board conversation.

Kirsty added that the qualities needed to create an inclusive culture can be summed up in a number of P’s:

  • Patience – it does not happen overnight
  • Passion – needs to be relevant and valued
  • Pragmatism – should bring practical consequences
  • Pig-headedness – it needs to be followed through to completion
  • A focus on the Practicalities – should bring it all together

From a leadership perspective, Louis concluded, there is another set of four C’s to bear in mind:

  • There is an element of Care for the people involved
  • You need a Commitment to make sure you do the right things and follow-through
  • There is a Community aspect in terms of pulling your people together
  • You need Confidence when it comes to bringing in new people and creating a board that is diverse and inclusive.

A lack of confidence can also be seen people who are highly skilled and professional but do not see themselves as ready to become a member of a board. Louis emphasised that more people, on the basis of inclusion and diversity, should re-examine their own career prospects and plan for this move at an earlier stage as part of their next career development.

In conclusion, it was a pleasure to listen to the insights from Kirsty and Louis. As we look forward, it is clear that boards are willing to display far more agility than the formulaic approach we used to see 10-15 years ago. With a new generation of directors coming through, it is imperative that boards demonstrate forward-thinking and a willingness to experiment and to see what works – focusing on the positives and on the opportunities.