Diversity and inclusion initiatives (D&I) are generating apathy and cynicism in financial services, according to a new report from The Inclusion Initiative at LSE.
The study involved interviews with 35 senior leaders in Singapore, most of whom have senior management oversight of international operations. They included, amongst others, representatives from Barclays, Credit Suisse, JP Morgan, Morgan Stanley, UBS, DBS and OCBC. Their roles included regional CEOs, global divisional heads, COOs, head of trading desks, asset managers and investment bankers.
One executive commented: “We have mostly launched into D&I initiatives without senior executives making an effort to explain why that is important. Some colleagues simply roll their eyes.”
The report highlights how simply assembling a superficially diverse team without consciously pursuing inclusion habits can have detrimental effects. Several executives expressed concerns about insincere virtue-signalling. Overall, the report highlights that gains from diversity cannot be reaped unless compliance mechanisms, such as quotas and monitoring, are supported with real culture change. To support a culture change journey for global organisations the report provides a nine-point framework conveniently represented by the acronym INCLUSION.
Underpinning the INCLUSION framework is a call to action to move D&I out of HR, and instead emphasise inclusive leadership in every aspect of the business. Inclusiveness as a style and form of leadership has to be deliberately honed, the authors insist. Leaders who may have been promoted on the basis of their core technical expertise need training in how to lead inclusively. This is especially important when the team is culturally, cognitively and linguistically diverse.
Another executive commented: “We have policies and guidance on how to get people into the room. However, once in the room, we don’t know how to ensure that people are heard. If there isn’t an environment of trust, people wouldn’t express themselves authentically whether they are asked to speak first or last”.
According to the report, without inclusive leadership the competitive edge that diversity brings goes unrealised. As one female executive commented, “As the only woman at the meeting, if I know that the others have already reached consensus, it’s easier for me to hold back my views”.
The report discusses the need to avoid confirmation bias when hiring, given that many of those interviewed raised a tendency for too many managers in financial services to hire in their own likeness.
As one executive observed: “I don’t know why or how but we all end up being similar type of people in financial services!”
Commenting on the findings, study lead Dr Grace Lordan, Director of The Inclusion Initiative at LSE, said:
“Some executives I met raised frustration that their firms engaged in virtue signalling when it came to D&I, while others were still sceptical that diversity was good for business. However, every leader I met held a belief that the voices of all talent around their table should be heard and leveraged. This will only come when financial services have managers across all levels of seniority who embrace an inclusive leadership style because they are certain it is better for their own objectives. If I am diverse and sitting at a table where everyone is heard and gets opportunities, I won’t need a HR mandate to ensure my progression is fair. However, until inclusive leadership is embraced by managers at all levels, we are stuck in a compliance phase with audits and monitoring. I do hope the next decade sees us moving from compliance to culture change. The managers that we promote because they are fantastic income generators need to invest in becoming inclusive leaders”.
The report’s co-investigator and visiting Professor in Practice at LSE, Lutfey Siddiqi, added: “As a global financial centre and a regional gateway, Singapore sits at the nexus of East and West. It both highlights and provides solutions to the need for an inclusive, context-sensitive approach to inclusion initiatives in international finance”.