Gear towards better diversity management

Diversity

‘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.

4 thoughts on “Gear towards better diversity management

  1. When you mention that finance and accounting teams need to be involved in displaying diversity, are you saying that they currently not involved or that they could be the greatest impact that shows management teams the importance of diversity when it comes to the organisational performance?

  2. Living in a country as diverse as South Africa, should this not have been the focus all along rather than falling back on economic policies such as BEE, Affirmative Action and other policies intended to help the economic climate of our country? By tapping into and understanding our cultural differences, our economy can only go from strength to strength, something most CEO’s have probably noticed at a point. So why are we only gearing towards it now? Should this not have been implemented along with the changes in 1994? In an integrated workforce, respect and understanding of our diversity is key to a business’s success. Also, gender diversity is something the corporate world has been focusing on for years, and they seem to be on the right track to achieve these objectives, especially with the passing of the Women Empowerment and Gender Equality Bill this year. Isn’t it time to broaden the focus to cultural and ethnic diversity now? But diversity management isn’t only about ensuring that the statistics look good when you get audited. It should focus on how a business treats its people and their motives behind it. Motives have to play a role because no one likes having the wool pulled over their eyes, and this could lead to disastrous consequences when management is caught out. This also shouldn’t rest squarely on the financial team’s shoulders. A report combining financials, overall performance and human resource reports will prove much more effective in determining the organisation’s success. Thus, a joint effort between finance and human resources should be made. Organisations can even create a new executive position : Chief Diversity Officer, as some large firms have done. And all this should be incorporated from the start, from the junior positions to the executives. Promoting diversity can only mean good things for South Africa’s economy.

    • Dear Meghan,

      Thank-you for the interesting reply. Chief Diversity Officer (CDO) is certainly something we would like to explore further. Would you be interested in contributing to the ACCA blog? If so please could you send us your details to infoza@accaglobal.com.

      Looking forward to your response,

      Regards,
      ACCA South Africa

  3. Diversity in the workplace is actually a serious matter to address. With the correct approach, businesses can eliminate unfair treatment in the workplace through understanding the different diversities. I think businesses who seek to address the matter of diversity, will also find that workers will have a better work attitude, knowing that their employers are looking out for them. This better work performance will lead to greater profit for the business and will have a positive impact on South Africa’s economy.

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