Is institutional inertia holding back diversity?

Despite repeated recommendations that companies should improve the number of women on their boards, two-thirds of FTSE 100 companies have failed to do so.  Is however gender diversity at board level a real priority in the current economic climate?

The arguments in favour of diversity are well-known.  Research clearly shows that consistently recruiting similar people is bad for business, while introducing diverse personality types can increase innovation, enhance the organisation’s brand image and attract a broader range of customers.   And yet the rhetoric of diversity still seems to fail to translate into practice.  Ruth Sealy, co-author of a report by the Cranfield School of Management, highlights the problem of ‘institutional inertia, whereby companies persist in their existing approach – or lack thereof – to gender diversity at board level’.

For many managers under pressure to deliver more with less, diversity issues (whether based on gender or other factors) rarely feature more than to ensure their practices comply with current legislation.  For most, discussions about boardroom diversity are largely academic as their opportunity to directly influence this is limited.

Baroness Sheila Noakes, a non-executive director for RBS, suggests that to ensure board room diversity, organisations need to ensure ‘a flow of women coming through the ranks in general’.   Institutional inertia however is not something that just affects the prospects of women at board level.  In the current economic situation, women seem to be experiencing a particularly hard time.  Women’s unemployment is at its highest in 23 years, and the kind of work women traditionally do in both the public and private sector is being severely reduced.

When under pressure, it’s all too easy to fall back on tried and tested approaches, but perhaps these are the very times when new ways of thinking are most needed.  Encouraging diversity at all levels should be on every manager’s agenda, not just to tick some compliance box, but to give the organisation the injection of fresh ideas that will actually help it thrive during hard times.