How can CEOs improve diversity in ‘build back better’ plans?

Covid-19 and Black Lives Matter have highlighted how much needs to change to improve gender and ethnic diversity


Natalie Kenway

Company leaders are being urged to incorporate diversity and inclusion (D&I) factors into their Covid-19 recovery plans, amid concerns D&I efforts are seen as one-off campaigns rather than initiatives that need to be maintained and nurtured

Groups in the investment industry and other business sectors have been giving more airtime to D&I over the past few years, and the benefits of a more diverse workforce (innovation, better financial returns, wider range of expertise to name a few) appear to be more well understood.

However, as diversity committees are set up and heads of D&I hired, there are still concerns the practise has become a box-ticking exercise rather than a real ambition to make ongoing change.

This year, the Covid-19 crisis and Black Lives Matter movement, following a number of racial injustices including the death of George Floyd, have both highlighted how inequality is still rampant and more sadly, widely accepted. As a result, members of the asset management industry are calling on senior management of companies in the sector to play their part and ensure D&I is a key focus in plans to move forward.

Bev Shah, founder and CEO of City Hive, the network for change in asset management, said despite the campaigns over recent years, there is still little change:

“Firms who have made D&I a board level priority have recognised that it is required not only to meet their sustainability responsibilities, but also to future proof their business.  If D&I is properly woven into the backbone of an organisation, then the business will attract and retain both talent and revenue. 

“However, the issue often doesn’t lie with the will to change, but the expertise and a reluctance to invest in real solutions.”


The Diversity Project recently said in an announcement to help the investment industry to ‘build back better’ that coronavirus has accelerated real cultural change in the sector; employees ability to quickly embrace modern working and management’s more engaged and visible leadership has increased empathy and inclusivity, it said.

However, sustaining this progress is not guaranteed and as firms start to emerge from the crisis, the Diversity Project urged: “It is time to intensify, not lessen, efforts to create inclusive cultures.

“Diverse perspectives are needed to deliver answers to complex issues faced by the industry,” it said.

“This pandemic has forced a change momentum upon us; now is the opportunity to accelerate positive change,” added Jayne Styles, co-lead of the Diversity Project’s Ambassador Programme.

“With such an uncertain outlook, it is more important than ever to embrace inclusivity and diversity to enable business resilience and building back better. This is true for any industry, but the focus on ESG investing makes it vital for our industries’ credibility and legitimacy.”

Dame Helena Morrissey, chair of the Diversity Project, added: “The coronavirus crisis has exacerbated societal inequalities, but also shown us how to work differently. It’s also highlighted the importance of diverse and creative thinking as we wrestle with complex issues. The fund management industry, previously slow to modernise, has a choice to make: to build back better, or to revert to its old ways. I’m encouraged by all the evidence that leaders want to seize this moment to make real progress and hope this compendium of suggestions is helpful.”

Ethnic diversity

In the inaugural episode of its ESG podcast series, Beyond the Buzz, S&P Global’s CEO, Douglas Peterson, said he was encouraged by how companies had responded to systemic racism in light of the Black Lives Matter movement, but again urged companies to see this through.

He said: “Interest in sustainable and ESG investing intensified throughout the Covid-19 pandemic and now with the deaths of George Floyd, Ahmaud Arbery and Reyshard Brooks, a new level of attention has been brought to the open wound of racial inequality.

“It’s been a leading topic at roundtables of CEOs in the US and committees have been formed to address topics around this such as healthcare, education, finance and judicial reform.

“We have seen major commitments from large corporates to address systematic racism in the workplace – they have addressed how they intend to change from the inside.

“I have talked privately to many business leaders who are more committed than ever to take action and find new ways to tackle this issue.

“And the public, and increasingly investors, are going to expect results.”

See also: – Black Lives Matter: Can sentiment in corporates change permanently?

Corinne Bendersky, director & EMEA analytical coordinator of the sustainable finance arm of S&P Global, also reiterated in the podcast that while D&I programmes have existed for some time now, there has been little real change.

We continue to see structural disadvantages for black employees in terms of hiring, pay, equity and advancement, and we see this across multiple industries.

“Measuring corporate culture is a real challenge, but it is doable and certainly worthwhile.”

Peterson added the recent racially-motivated tragedies had sparked a lot of “soul searching” at the top of companies and some very difficult conversations, but this is what is needed for progress to be made.

Corporate leaders can learn more by speaking less and listening more, and listening carefully,” Peterson said.

“Don’t rush, take your time to listen and then take action.

“By listening to my colleagues, I have heard deeply moving and panful stories. I have talked to colleagues across the organisation to discuss what type of actions we can implement.”

Feedback from the S&P Global workforce suggested the firm should take charge of measuring its efforts to recruit and retain an inclusive employee base, respect the breadth of diversity within the black community, and dedicate more to organisations driving justice initiatives in society.


A number of organisations are providing groups with advice and factors for consideration to move forwards and help ‘build back better’, particularly from a diversity perspective, in plans to recover from an extremely volatile first half of 2020, which saw once-in-a-generation shifts in stock markets and day-to-day lives.

The Diversity Project called on companies to “seize the opportunity and accelerate the D&I agenda” with four key considerations for leaders:

  1. Resilience: leverage the benefits of D&I to iterate a range of ‘outside-in’ scenarios, from which to learn quickly, pivot if necessary, and move on. Done best, this requires a diverse group of people with significantly different experiences and points of view, who are free to express these and to challenge collective mental models of how the world works.
  • Role modelling: the actions of leaders across the industry during lockdown have initiated positive cultural shifts, with increased inclusivity and empathy. Build on this advantage by embedding D&I into corporate strategies and role modelling inclusive leadership. Identify the blockers to building a diverse workforce; set data-driven, measurable targets; develop action plans and promote social accountability.
  • Flexible working: being truly flexible will widen the talent pool, boost staff retention, engagement and productivity; and give scope to cut estate costs. It is key that flexible working becomes normalised; not seen as a ‘perk’ for the few. This will involve wide adoption of flexible working and a shift to collective responsibility for making it successful.
  • Collaboration: leaders should consider whom they turn to, internally and externally. Now is the time to change the composition of the group if not sufficiently diverse and to work with specialist organisations to facilitate effective delivery of D&I strategies.

Luba Nikulina, managing director and head of research at Willis Towers Watson, echoed the sentiment the industry should not miss an opportunity to learn from recent experiences.

“[We need to] make a positive step change in how we work together, with more purpose, more trust, more flexibility, better inclusion, less travel. 

“It is not going to be easy considering individual circumstances are so diverse, but taking advantage of this opportunity to improve the way we operate in our industry not only can help us achieve better investment outcomes for savers but also deliver these outcomes in the world worth living in.”

Meanwhile, Eliot Caroom, product manager and senior research analyst at ESG data provider Truvalue Labs, added in the investment community, where there is a wide range of powerful stakeholders, there is an opportunity to dismantle corporate policies that discriminate against people.

He said a series of questions have been developed by the Principles for Responsible Investment (PRI), Business & Human Rights Resource Centre, California State Teachers’ Retirement System and APG for investors to use and build on existing engagement best practices, as well as serve as a template for investors to engage on issues of racial justice and equity.  

These questions encompass customer privacy, selling practices and affordability, human rights, supply chain management, employee health and safety, labour practices, employee engagement and leadership and governance.

Caroom said: “Since the killing of George Floyd on May 25, protests have forced businesses around the world to confront issues of racial injustice that are specific to their region and business area.

“If we ask if “enough” is being done, the answer is that action for racial justice is never enough until our society has fundamentally changed.”

Recent initiatives

There have been more recent developments to encourage change: ESG Clarity’s sister title International Adviser recently reported the Chartered Insurance Institute (CII) has committed to making sure the diversity and inclusion policies that member firms have in place are having a positive difference on the make-up of the profession.

Last summer, the CII unveiled five actions to ensure chartered firms have a positive social impact and contribute to the development of the wider profession, including a requirement for companies to have a diversity and inclusion policy from July 2019.

To make sure these policies are delivering positive change for the profession and wider society, the CII said that, from 2021, it will request examples of the impact the approaches are having on chartered firms when they wish to renew their status.

Encouragingly, more than 900 chartered firms that seek to retain their status in 2020 have confirmed they will have a diversity and inclusion policy in place by the end of this year.

Furthermore, 10 investment firms joined together to help connect businesses directly with students to tackle the underrepresentation in the industry. Run by Entrepreneurs in Action as part of its Classroom to Boardroom initiative, firms will work with more than 25 black students, primarily from schools across south London, to find ways to increase the applications, opportunities and development of young black people in entry-level roles. Participating organisations include: Aon; Fidelity International; Invesco; LCP; Lincoln Pensions; Mercer; Morgan Stanley; St James’ Place; and Wellington.

These moves and public statements made by CEOs to address inequality in the workplace is certainly a step forward; this being driven by corporate leadership is an important signal. Let us hope these promises and ambitions are taken seriously amid a very uncertain future for the economy and stock markets and are not left behind when (not if) volatility strikes again.

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