FTSE 100 companies perform better than their US and Canadian counterparts in diversity and inclusion, but many employees still do not feel included at work.
The 30% Club, which campaigns for 30% representation of women on FTSE 350 boards and advocates for racial diversity at senior level, commissioned data analytics company Diversio to analyse performance on diversity and inclusion metrics across the FTSE 100, S&P 500 (a similar measure of publicly listed US companies) and TSX 60 (which ranks the top 60 listed companies on the Toronto Stock Exchange).
Overall, the FTSE 100 scored 65.7 out of a possible 100 for diversity, inclusion and commitment. The S&P 500 scored 58.8 and the TSX 60 55.1.
The report found that there had been progress on gender diversity at board level across all three, with female representation at 40% in the FTSE 100. At executive level, however, female representation sits at 26%.
In terms of race, FTSE 100 companies have an average of 14% representation at board level for black, Asian, and other ethnic minorities, and 13% at executive level.
Diversity and inclusion
The best performing sectors in terms of diversity were real estate, energy, and IT, while the worst performing were financial services, utilities and “consumer discretionary”.
Diversio also analysed 27 inclusion metrics based on publicly available policies and employee reviews. The researchers found this was the area where companies could make most improvement.
They looked at six categories: inclusive culture, fair management, career development, workplace flexibility, workplace safety, and recruiting.
By scraping negative employee reviews of companies and analysing the content, Diversio found that 79% of reviews cited inclusion-related issues as the reason for their discontent.
FTSE 100 companies outperformed the global average on all metrics, particularly in hiring and recruiting, where they scored 6.8 out of a possible 10. However, when asked whether staff felt included by peers, this score was 6.1 (compared with 5.8 global average).
The research found that common issues with inclusion were leaders who failed to “live” diversity values or a lack of adequate resources to succeed.
Comments included “very old school management style”, or “domineering/bullying management style”, as well as complaints about companies being “profit driven with constant cost cutting at the expense of everything”.
Top scoring companies across all of Diversio’s metrics included: Pershing Square Holdings, Mondi, and Segro.
Laura McGee, co-founder and CEO of Diversio, said: “The quickest way for low-scoring sectors and companies to improve is by surveying employees and implementing fundamental programmes and policies, including a DEI strategy with executive-level accountability and transparent reporting.
“Survey data can help leaders understand company culture and any barriers that might be faced by under-represented groups.”
Ann Cairns, global chair of the 30% Club, added that it was critical for firms to not just track diversity but also inclusion.
“All companies should have fundamental DEI programmes and policies in place and need to listen to employees to identify pain points and create a smooth funnel to leadership,” she said.