Diversity in business is hampered by a data gap, finds new research from Brunel University, commissioned by ACCA (the Association of Chartered Certified Accountants) and the Economic and Social Research Council (ESRC).
Towards better diversity management – which summarises the full research and draws on previous work on the subject – reveals that organisations globally often lack basic information about diversity in the workforce or their marketplace. The paper urges companies to involve the finance function to identify the data gaps, and then measure, analyse and interpret the data.
Claudia Chapman, head of policy and campaigns at ACCA, comments: “The expertise of the finance team can help demonstrate the linkages between good diversity management and business performance. The finance function could help diversity managers overcome some of the hurdles to success such as the pressure for short-term business results and lack of support within the business.”
The paper recommends that an effective business case for diversity should not just focus on the bottom line, but also account for shareholder value, stakeholder value, the regulatory context and the global value chain of the company’s operations – which organisations are urged to think about more.
Brunel’s academic experts offer four recommendations for business, regardless of the sector in which they work, saying:
- Customise the business case taking into account a wide range of stakeholders and the environment
- Make data central to design
- Give the finance function a central role in the design of a business case
- Prepare the business to focus on medium-term and long-term gains to see the greatest benefit.
Nikki Walker, from diversity and inclusion (D&I) consultancy more2Gain, also argues in the paper for the involvement of finance teams in D&I activities to gain executive and management commitment, saying: “Business people focus on what they think will bring business value. Unless you can demonstrate to senior business leaders and to managers that there is value in them doing something different, why would they do it? Intellectually accepting that greater diversity would be the ‘right’ or ‘fair’ thing to do is not enough. You have to show them the opportunity or the loss and risk if they don’t do it.”
Bruce Jackson, ESRC’s Senior Knowledge Exchange Manager, commented: “Through our partnership with ACCA we share a commitment to encouraging independent, high quality research that informs and impacts business, the third and public sectors as well as governments. This paper brings together findings from a series of high-quality independent research projects that explore the issues surrounding diversity in business and gives a number of action points for senior management and finance functions to help their businesses grow and prosper in an increasingly global context.”
Claudia Chapman concludes: “There is clear value in the finance function and accounting teams being included in demonstrating how the business impact of workforce diversity can be measured. Finance can strengthen the diversity business case, enable accountability and governance, but someone needs to make the first move.”