Driving diversity, inclusion and sustainability. Are CEOs and boards walking the talk?

11 Aug 2022

Driving diversity, inclusion and sustainability. Are CEOs and boards walking the talk?

Our 2022 Leadership Confidence Index raised questions about progress on two vital issues, and not all the answers are good ones.

"The two years of the pandemic were the most widespread and significant pan-global shock most of us have ever experienced. The impacts on business and the economy continue to reverberate, as the challenges to leadership continue to evolve", states Dagmar-Elena Markworth, partner at Odgers Berndtson Germany.

Our Global Leadership Confidence Index provides a unique measure of those challenges and the responses by senior leaders, driven by a survey just before, and now, just after, the pandemic. 

One of the subjects explored was senior leader’s commitment and action on diversity and inclusion, and sustainability. How much was talk we wanted to know, how much real action was there? And what did the people being led think? That’s what we explore in this insight . (You can read the full report’s findings by downloading it now.)

Download the report here: Leadership Confidence Index 2022

Diversity and sustainability are unavoidable issues

"Diversity has become a serious trend for all companies. Some are early adopters driving this new paradigm, others are still struggleing with obsolete mindsets", explains Michael Proft, partner at Odgers Berndtson Germany.  

We know that Boards and CEOs have consistently been increasing the volume of their messaging and commitment to diversity, inclusion and sustainability over recent years. 

The data shows there is a relatively medium to high level of confidence in the leadership team for this. So, the messaging is getting through, and this has driven expectations.

When asked how much confidence there was in senior executives to lead in improving inclusion and diversity, there was a 34% measure of high confidence, with most (54%) expressing a medium level of confidence.

But confidence is one thing, action and progress is another.

Here the picture is a little less clear. For example, when we asked  how much actual rates of inclusion and diversity had improved at their organization over the past two years, only 24% were highly positive. The largest majority fell below that standard. Clearly, there is much work to be done to match words with action.

Actions lag behind words

Further interest comes when we probed the specific actions that organizations were taking to move the dial on diversity and inclusion.

No single action breached the 50% mark. 

The most mentioned successes were in ‘Creating a safe environment for employee feedback about diversity and discrimination issues’ which came in at 46%.

The next most positive signal was ‘Ensuring your employees know about inclusion and diversity efforts and work being done to reduce bias’ (43%).

Germany’s position is no better

Turning to Germany specifically, we can see there is still much to do on diversity and inclusion for many German organizations. Especially in the management suite.

This is the clear conclusion of a different, more specific study on the subject: the 2021 Odgers Berndtson Germany Inclusion & Diversity survey of board and C-suite level leaders.

This survey found that while diversity is increasingly becoming a reality in corporate practice at the lower and middle levels, there is a rather less diverse picture of the management floors of German companies.

The survey reveals that the  path to more diversity in the upper echelons of companies is still opaque. So far there have been hardly any strategic measures to change the situation in the management floors. At best, leadership assessments and coaching – especially for women – is advocated.

Less talk, more walk

On the subject of sustainability, the figures in our 2022 Leadership Confidence Index tended to show a fairly low level in both progress and the confidence in leaders to continue to deliver on the subject. There is clear room for improvement on both fronts.

The wider point worth making on both diversity and inclusion, and sustainability, is that our survey show that results delivered are running at a slower pace than the rhetoric.

There is certainly a risk for leaders here.  The Environmental, Social, and Governance agenda is well advanced up the personal priorities list of employees. So, the onus falls on an executive team to deliver on their goals for inclusion, diversity, and sustainability. Fail to do so and employees might well lose faith and leave.

Perhaps they will go to companies where they believe the leadership team is better aligned with their values and beliefs.

On the up-side, companies who have achieved real progress will find themselves with a competitive advantage when it comes to attracting the best talent.

Leadership is yet again key

The challenges facing leaders to go beyond the rhetoric on important issues like diversity and inclusion, and sustainability, are clear. To succeed, they will face a complex and demanding social and corporate landscape with much at stake. The demand is for those who can lead with humility, empathy and a sustainable vision.

Finding leaders who can lead successfully continues to separate success from failure.

Our LeaderFit profile model can help provide just such a picture of those who might have the potential to succeed. By using a unique leadership assessment methodology that combines personality data, behavioural patterns and leadership experts’ judgement, we can paint a picture of individual performance in targeted senior roles.

We have experience of assessing and developing leaders across publicly-traded companies, privately funded companies, and government/not-for-profit organizations.

To discuss our 2022 Leadership Confidence Index and how the issues it raises might affect your talent and leadership planning, or for advice on your own career trajectory, please get in touch.