Diversity in business is mainly driven by performance concerns: more diverse teams are shown to take better decisions, and recruitment and promotion approaches that fail successfully to encompass the whole population restrict the talent available to an organisation. But fairness is also one of the drivers for diversity in the business context.
Advancing those who have previously been denied advancement is a matter of fairness, and a move to greater fairness sends a message to the wider organisation, its business partners, and to prospective recruits about the nature of the business and the role it wants to play in the world. Many will thereby see the company as a better business partner, a better potential employer, and a favoured choice for consumers.
According to my friends and former colleagues at Australian responsible investment shop Regnan, however, the role of fairness in diversity goes further than this. Their recent study of the literature reveals that diversity may deliver little on its own, unless it is accompanied by both equity and inclusion. By equity, they mean “fair arrangements that enable all people to access opportunities” and by inclusion, “workplace conditions that enable all individuals to make their fullest contributions at work”.
To deliver fair and equitable employment practices – a pre-requisite, they say, for delivering on the promise of the diversity agenda – Regnan argues that companies must eliminate bias throughout employment processes, including recruitment, remuneration, development and progression. To be most effective, this requires leaning proactively against biases and existing power imbalances. They highlight areas of focus to deliver this, and discuss metrics that may help to reveal more about it.
“Equitable employment practices and inclusive decision-making are direct levers for improving performance, irrespective of diversity. Failure to adopt these practices may indicate broader business issues (such as entrenched management)”
The paper is a thought-provoking and highly recommended read.
Beyond Diversity: Equity and inclusion as an overlooked opportunity for investors, Regnan, July 2021