Social background: the forgotten dimension of diversity by FTSE 100

While some free-market economists like Milton Friedman used to think that company executives did not need to worry about anything other than a balance sheet, in the 21st century employees, customers and investors are asking business leaders to focus more and more their attention on social questions too.

Although the urge to consider more the “S” in ESG comes from multiple sides, a new research, led by the University of Exeter, shows that few major UK companies have a strategy to diversify the social environment of employees and that employers are doing little to offer equal opportunities to those from different socio-economic backgrounds.

Specifically, the researchers analyzed the diversity policies of FTSE 100 companies in search of tangible commitments that included creating social mobility networks or considering class as a recruiting factor.

The survey showed that only 12 FTSE 100 companies can claim to take social class seriously in terms of equality and hiring, and that nearly half of the largest companies in the UK have made no mention of socioeconomic background in their diversity strategies or in annual reports.

Among the companies that have distinguished themselves positively in terms of social sustainability, the insurance company Admiral and Schroders Asset Management have signed an initiative, supported by former education secretary Justine Greening, which required signatories to offer work experience to those who came from disadvantaged backgrounds.

However, some of those listed in the top 12, such as Barratt Developments, despite having committed to providing scholarships or offering internships through the government’s Kickstart program (a program that allows companies to recruit young people between 16 and 24 years without having to pay either salary or contributions for the first six months), have not undertaken substantial initiatives which would allow the creation of real social mobility networks.

The social gap is, in fact, even more evident at senior and executive management levels: The Bridge Group found that a quarter of the senior executives of companies in the city have attended a private school and almost nine out of 10 come from a higher socio-economic context.

As noted by Sarah Atkinson, CEO of the Social Mobility Foundation, social class is the “forgotten dimension of diversity” and is very often overlooked by companies, in favor of characteristics such as gender or ethnicity that are legally protected under the Equality Act of 2010.

It is certainly more challenging to measure the socio-economic background and it’s clear that many factors need to be considered, including the schools attended, family income, parents’ employment or the first generation at university; this aspect, however, cannot be ignored in the long road that the FTSE 100 has to do to build a more inclusive work culture.

Solving this problem is of great importance for business, not only from the qualitative point of view of better reporting, but also for the effectiveness of the decision-making and strategic process that would benefit from socio-economic diversity to mitigate the danger of group thinking and provide companies with a wider pool of talents to rely on.

RELATED

Social background: the forgotten dimension of diversity by FTSE 100

While some free-market economists like Milton Friedman used to think that company executives did not need to worry about anything other than a balance sheet, in the 21st century employees, customers and investors are asking business leaders to focus more and more their attention on social questions too.

Although the urge to consider more the “S” in ESG comes from multiple sides, a new research, led by the University of Exeter, shows that few major UK companies have a strategy to diversify the social environment of employees and that employers are doing little to offer equal opportunities to those from different socio-economic backgrounds.

Specifically, the researchers analyzed the diversity policies of FTSE 100 companies in search of tangible commitments that included creating social mobility networks or considering class as a recruiting factor.

The survey showed that only 12 FTSE 100 companies can claim to take social class seriously in terms of equality and hiring, and that nearly half of the largest companies in the UK have made no mention of socioeconomic background in their diversity strategies or in annual reports.

Among the companies that have distinguished themselves positively in terms of social sustainability, the insurance company Admiral and Schroders Asset Management have signed an initiative, supported by former education secretary Justine Greening, which required signatories to offer work experience to those who came from disadvantaged backgrounds.

However, some of those listed in the top 12, such as Barratt Developments, despite having committed to providing scholarships or offering internships through the government’s Kickstart program (a program that allows companies to recruit young people between 16 and 24 years without having to pay either salary or contributions for the first six months), have not undertaken substantial initiatives which would allow the creation of real social mobility networks.

The social gap is, in fact, even more evident at senior and executive management levels: The Bridge Group found that a quarter of the senior executives of companies in the city have attended a private school and almost nine out of 10 come from a higher socio-economic context.

As noted by Sarah Atkinson, CEO of the Social Mobility Foundation, social class is the “forgotten dimension of diversity” and is very often overlooked by companies, in favor of characteristics such as gender or ethnicity that are legally protected under the Equality Act of 2010.

It is certainly more challenging to measure the socio-economic background and it’s clear that many factors need to be considered, including the schools attended, family income, parents’ employment or the first generation at university; this aspect, however, cannot be ignored in the long road that the FTSE 100 has to do to build a more inclusive work culture.

Solving this problem is of great importance for business, not only from the qualitative point of view of better reporting, but also for the effectiveness of the decision-making and strategic process that would benefit from socio-economic diversity to mitigate the danger of group thinking and provide companies with a wider pool of talents to rely on.

RELATED

ETFs: the surge of not-so-green ESG investments

ETFs: the surge of not-so-green ESG investments Following the two years of COVID-19 pandemic, confidence towards ESG investments rose as the sensitivity towards climate change and social issues became more...

Read More

Leave a Reply

Your email address will not be published.