With the publication of new guidance for companies reporting on diversity, we take a look at the findings and on the wider context of diversity reporting in the UK.
Diversity and inclusion has become increasingly important for businesses, with growing expectations towards commitment not only from the workforce but also from clients and customers, investors and suppliers. In recent years the UK has introduced a number of mandatory reporting requirements for certain employers, such as gender pay gap reporting, and there have been growing calls for widening mandatory reporting initiatives in other areas too. Beyond the mandatory requirements, some companies have voluntarily published narratives to accompany their data and reporting obligations to help frame the context of their work in the D&I field.
This latest guidance from the 30% Club UK, an investor group seeking to increase diversity within companies, provides some helpful insight into how reporting can be made more effective and comprehensive.
The guidance identifies the key principles that investors look for in good diversity reports including:
- Authentic and Strategic – reports should reflect the realities of the business and contain honest discourse on development areas.
- Quality over quantity – it recommends that reports should be concise yet meaningful to convey a sense of a company's diversity approach without having to review significant quantities of information.
- Action-led – reports should emphasise what is actually being done by the company to encourage and improve diversity. Progress against objectives should be reported on annually.
- Explanatory and Informative –reports should put data into context by supporting statistics with explanations to provide an understanding of why companies' statistics are at their current level, how it is trying to improve them, and how and why they have changed over time.
- Flexible but comparable – it suggests that reports should let companies create their own framework while also encouraging common features to enable comparisons to be made.
Diversity reports are also an opportunity for businesses to demonstrate the work and progress they are making on diversity and inclusion not only to investors but also to their own staff, prospective employees, their client base, suppliers and the wider public and to show leadership on diversity and inclusion initiatives by demonstrating the engagement of senior stakeholders in those initiatives.
An action plan should set out the positive and measurable steps that the employer is taking to improve diversity and inclusion beyond stating existing measures which have already been actioned as part of a wider diversity strategy. Those measures should relate to the causes of the imbalance and should be specific, explaining how the business intends to action those measures. For example, "We plan to encourage flexible working for senior roles" – specify how, with examples. Will roles be advertised as open to flexible working as a default? How will flexible work patterns be championed in the business? Are there any senior role models already working flexibly?
It is also important to consider the underrepresented groups and the message the business wants to convey both to the existing workforce and to prospective candidates to ensure everyone feels supported, valued and included. For example, research published by the American Psychological Association this month shows that potential candidates from underrepresented groups had less desire to join companies with profit focused diversity statements, as opposed to those with statements framed in terms of fairness and social justice.
Contributors: Katherine Moore and Amir Farah-Abadi
Katherine is a Knowledge Lawyer at Addleshaw Goddard LLP at their Employment and Immigration Group based in our London office. Her responsibilities include know-how development, training both internally and for clients, providing current awareness updates on legislative, case law and practice changes, supporting the team's legal knowledge as well as working on strategic internal projects to benefit the team and contributing to the firm's knowledge management strategy. She joined Addleshaw Goddard LLP in July 2021 having previously worked as a Professional Support Lawyer in the Employment Group at PwC in their London office.