‘Diversity’ is a term that most of individuals are well acquainted with. However, what does diversity actually mean on a practical basis for business, and more specifically for finance functions? As part of an ongoing partnership to hearten independent and high-quality research that informs as well as outlines business, ACCA and ESRC (Economic and Social Research Council) have run a string of projects to assess and explore the core concerns surrounding diversity in business.
According to ACCA’s report: Towards better diversity management, diversity can relate to innovation, inclusion and access, but a true understanding of diversity can be elusive in relation to changing cultures and behaviours, and having meaningful engagement. The collaborative report presents the efforts of the most recent project in this series. It discusses the limitations of current diversity management in addition to what could be done to help businesses benefit from better diversity. The report also builds upon the expertise of diversity and inclusion specialist, Nikki Walker from More2Gain, and reflects back at some earlier joint work. Moreover, it considers different approaches to constructing the business case in organisations, plus the motivations behind diversity policy and its relationship with business performance. The report also provides recommendations for organisations wishing to develop their own business case for diversity management.
‘Diversity has risen steadily onto the agenda of corporate leaders, driven by growing recognition and by government measures in a number of countries to equalise the gender imbalance on corporate boards.’ A vast number of CEOs, managers and stakeholders across the globe are taking note and acquainting entities with the concept of diversity management. Furthermore, business leaders are slowly recognising that diversity or lack thereof influences the company brand and makes a substantial difference to both potential consumers and free market talent when considering similar products, employers or businesses. The report states that several organisations have invested heavily in diversity, with gender being at the top of the list. These organisations are investing in developing influential leaders and creating inclusive cultures in which everyone feels valued and able to achieve their potential.
The report considers the role of the finance function in helping gather relevant financial and non-financial data and developing and implementing diversity strategies, policies and procedures. According to the latest research from ACCA and the ESR, the finance function has a central role in enabling companies to use diversity to drive enhanced business performance. ‘Progress in many companies is hampered by a data gap. Organisations often lack basic information about diversity in their workforce or marketplace. Finance and accounting teams need to become involved in demonstrating how the business impact of workforce diversity can be measured. Better data gathering, and analysis, and promotion of the links between diversity, innovation and performance would be an important step towards more effective diversity strategies.’
South Africa is a nation of diversity thus organisations should seek to involve employees at diverse levels and in every function in the design and implementation of diversity policies. This facilitates open and informative communication channels instead of the dictation of diversity practices from the top down. ‘Organisations also need to provide adequate resources, training and empowerment to those leading diversity initiatives, treating diversity as a strategic asset.’ Organisations should view diversity as ‘an organic part of the business’ that enables them to provide flexible working arrangements and mirror the local community. Effective management of diversity can have influence a company’s brand greatly. Thus, it is important to for organisations to look at the links between diversity management and organisational performance.