LGIM has three behaviors that underpin business: being simple, targeted, and collaborative; In addition to a set of key values – trust, listening, change, diversity and learning: we still encounter companies that question the pursuit of diversity and say that people should be hired and appointed solely on the basis of their performance. “Our answer to that is that they should definitely be nominated based on merit, but you`re more likely to nominate based on merit as you expand your talent pool,” Payn says. “If you only choose from 50% of the population, how are you going to choose the best people? This is not statistically possible. Promote these values in our own companies, in the legal profession and in the wider business world. It would be hard to find an organization (at least in the Western world) that doesn`t mention diversity and inclusion (D&I) as a priority. While it`s one thing to express interest in hiring and retaining a more balanced workforce, achieving it is a big challenge, as evidenced by the lack of diversity in most workplaces. We have also created the position of Chief Inclusion and Culture Officer for LGIM. This role means we always have a leader who leads the ongoing development of LGIM`s culture, diversity and inclusion goals. For most of us, the answer seems obvious. Morally and socially, promoting diversity creates a more inclusive world. But it can also have huge benefits for businesses, especially in times of fierce competition, as Clare Payn, Senior Global ESG and Diversity Manager at LGIM explains: “This means we have the best people and talent across all teams and at all levels of a company to ensure the sustainability of the business. We need to have this balance to avoid groupthink and avoid risks and opportunities not being taken into account. We also see diversity as an important financial issue for our clients, with investment implications for the assets we manage on their behalf.
The positive mood had spread to other areas of DCI, encouraging employees to roll up their sleeves. At the same time, part of the Group`s variable compensation is attributed to their influence on creating an inclusive culture. There is also an annual culture review with departmental leadership teams on their diversity and inclusion efforts. You can`t just say, “I did my ten things in my job, and in fact I behaved cruelly.” They presented real evidence of what I have done to be positive in diversity. So this could be in some parts of your day-to-day role, but also in terms of engaging in networking groups or through recruitment. We are collectively committed to working together to achieve greater equity, diversity and inclusion within our teams and the legal profession at large. Promote diversity initiatives at all levels of the legal and business world. “The committee brought its national commitment to diversity and inclusion to life on the ground by listening to its staff, understanding their perspectives, taking suggestions, and then designing and implementing a compelling diversity and inclusion strategy, particularly to address areas of interest to the Cardiff team.” Encourage and partner with our law firms to adopt best practices in diversity and inclusion. The members of the Committee live by its values. They based their local inclusion strategy on people`s suggestions and perspectives and created a plan that includes the implementation of events and initiatives. Activities include: Black History Month; International Women`s Day; Cymru Pride; The Menopause Exchange, World Mental Health Day and LGBT History Month. These events have been cited as examples of good practice in diversity and inclusion in business in Wales.
“Sometimes you might think that companies only use Pride for public relations. But I really felt that inclusion is built into all aspects of the office. But for those who want more concrete facts, there is plenty of evidence. Comerford pointed to the latest McKinsey & Co Delivering through Diversity report from 2018, which shows that companies in the top quartile for gender diversity are 21% more likely to outperform the profitability of the executive team. Also add ethnicity and cultural diversity, and companies are 33% more likely to see an increase in profitability. The report also found that LGBT people are 70% more likely to quit their current job if they are still in the closet at work for the next three years. We believe that a diverse board is extremely important, whether it`s diversity of thought, background, experience or gender. LGIM has established seven D&I network groups: gender, family, LGBT, ethnicity/race, socioeconomic mobility, neurodiversity, health and well-being. These all started at the same time and are supported by a different member of the management team, each moving forward identifying with those particular teams. Comerford recommended: Jones argues that while governance isn`t seen as “inspiring or sexy,” it`s important to get it right because it has profound implications for diversity, equity, and inclusion. The refresh of governance at L&G means there is now a high level of accountability at the top, linking DCI to the organization`s business objectives. Read our 2019 Active Ownership Report to learn more about our work to promote diversity, fight climate change and reduce income inequality.
LGIM has organized its D&I strategy into four key areas: focused on leadership; increase cognitive diversity; increase brand awareness; and building an inclusive culture. LGIM has also launched a fund that invests only in companies with a gender-diverse leadership team. When it comes to training DCI professionals, Jones isn`t sure there is enough support and believes there is more and more to learn. For employees, it highlights the important shift from unconscious bias to training for conscious inclusion. Another way to drive affirmative action and remove barriers to diversity and inclusion is to use our network of Legal and General Inclusion Team (LEGIT) employees. For us, as a company, we don`t invest in companies that don`t have gender diversity on their leadership team. So last year we voted against 108 companies and we used our vote to push back and say that you are the people who can bring about change here, not just government or industry commitments. As investors, we choose not to do that because the evidence that goes back to the business case is that if you have that, you have a healthy environment.
For 10 years, we have been using our position to exchange with companies on this subject. In 2020, with our expectations for gender diversity well established, we announced that starting in 2022, we will vote against board chairs in the US and UK who lack ethnic diversity. “In a turbulent year in which COVID-19 has exacerbated many of the inequalities that already exist in society, Business in the Community (BITC) has undergone a tremendous realignment by responsible companies to review their diversity and inclusion policies and assess whether they are having a real impact. Therefore, it is a great achievement for Legal and General to be recognized as responsible business champions in this area. Congratulations to the Legal and General Inclusion Committee and the entire team” LGIM`s leadership team strives to embed diversity in all aspects of the business. The cognitive diversity pillar of the D&I strategy is how to attract and retain diverse talent regardless of gender, ethnicity, background and education levels. We appreciate the breadth of perspectives, ideas and experiences that diversity offers. Whether based on gender, race, sexual orientation, disability, cultural background, religion or age.
For LGIM, after deciding to focus on diversity and inclusion, there were many explicit discussions about culture, with the tone set by the leadership team. This included a commitment to increasing diversity in the workforce and creating an inclusive culture that encourages people to be their best. We believe that cognitive diversity creates a better society and economy, which is why from 2022 onwards, we will vote against companies that do not meet established diversity standards for ethnicity. According to Henry Jones, listening is one of the key skills that diversity, equity and inclusion (CID) professionals need to succeed in their roles. Since becoming Group Head of Inclusion at Legal & General, he has been all ears. As noted in our Ethnic Diversity Report, the McKinsey Diversity Database shows that ethnic diversity is correlated with better financial performance, while BCG research suggests that companies with above-average diversity scores are more likely to generate higher revenue from innovative products and services.