Industry change starts with what we do ourselves and within our businesses

Bob Hunt

11 December 2020

You may well have read about the first meeting of the Diversity and Inclusivity Finance Forum (DIFF) that recently took place online.

Paradigm is a very proud member of the forum. To say that this is an important time for such an initiative, and for all financial services businesses to appraise their action in this area would be a huge understatement.

The societal change that is required is not difficult to see.

And perhaps this year more than most, we have been made fully aware of what is at stake and what we need to do in order to create an environment that will increase diversity and inspire inclusion.

Plus, of course, the role we can take within our firms to ensure our peers and colleagues are fully supported in our industry regardless of race, ethnicity, gender or sexual orientation.

Recently, the Financial Conduct Authority (FCA) also highlighted the action that regulated firms should be taking in order to make sure the financial services industry is fully reflective of the people it services, but this should be way beyond any sort of regulatory dictate and instead be all about what we need to do to reflect society.

It's why we believe DIFF is so important, and why it's absolutely right that a business like Paradigm is helping in leading the way here and setting the right example.

Anyone who has seen the power of the Black Lives Matter movement, or the horrific death of George Floyd; anyone who has witnessed gender inequality - whether it be in a boardroom or any other area of a firm; and anyone who has had to put up with a lack of equal pay, or seen discrimination in any other form, will feel the need for change.

Of course, it starts with what we can do ourselves and within our businesses.

This is an issue that is so much more than numbers but the argument for action is compelling, nonetheless. A research project undertaken by the management consultancy, McKinsey, highlighted specific results related to both gender and ethnic and cultural diversity.

In 2019, companies in the top quartile for gender diversity on executive teams were 25 per cent more likely to have above-average profitability than companies in the fourth quartiles. Similarly, for ethnic and cultural diversity, firms in the top quartile outperformed those in the fourth by 36 per cent.

So, what about your business? How does it compare?

McKinsey's dataset for its research revealed that a third of all companies still have no women on their executive teams, while the representation of ethnic minorities had only increased from seven per cent in 2014 to 13 per cent in 2019.

This is proving to be a slow journey but, with initiatives like DIFF, and with individuals and businesses taking responsibility for much-needed action in this area, we can hasten up the move to equality.

We will be taking a full part in DIFF meetings and helping to define the agenda and the change that can happen. We are urging our member firms to also get involved and we say the same to the entire industry - this is within our own hands and we need to put them to work.