Governance Watch - Issue 58

Diversity and Power

This week everyone in the United Kingdom was given an important lesson on the value of diversity in sorting out difficult issues.

As the Supreme Court, the highest court in the land, with its first-ever female President Brenda (Lady) Hale, delivered a unanimous verdict around the unlawful prorogation of Parliament, history was made. The motto on Baroness Hale's coat of arms is ‘Omnia Feminae Aequissimae’: Women are equal to everything. She has been outspoken on the need for diversity in the judiciary.

The ruling was on two legal challenges – one was brought by the businesswoman and Brexit legal campaigner Gina Miller, born to parents of Indian descent in what is now Guyana. In 2017, she was named the UK’s most influential black person and was also number 26 on the Asian power list of most influential British Asians.  

Lists such as these have been around for quite a long time, so visibility by ethnicity should not be the problem it used to be. In her memoir, Ms Miller wrote: “As a child of the Commonwealth, I had been brought up to believe Great Britain was the promised land, a culture where the rule of law was observed”, giving clues for her motives for bringing the case.

The second legal challenge was brought by a cross party group of 76 peers and MPs led by Ms Joanna Cherry, a Scottish National party MP, and including Liberal Democrat leader Jo Swinson. There is a common theme here around women and leadership and they have all emerged around the same crisis facing the country.

But if we look at business – which the Edelman trust monitor referred to many times here on Governance Watch consistently reveals as having the trust of more people in the UK, we find gender diversity to be an ongoing issue, while ethnic diversity is at best, stalled. We are at a stage where it seems that those who ‘get’ the need for diversity in the creation and running of better businesses are increasingly frustrated by the need for repetition, and those who don’t see the need for it seem unlikely to change their mind.

Despite years of government-backed independent reviews, UK business does not appear to be moving either when it comes to ethnic diversity and better representation. The reason for that might have as much to do with the broadening out of a power base as it has to do with finding suitable candidates. There are just too many incredibly hard-working, senior individuals who have worked on diversity initiatives for years who will say – privately at least– that the barriers to achieving diversity are imposed, and they are imposed by an old male guard.

The importance of corporate culture to the ethos of a business, to its values and its purpose, is evident. Diversity has a critical role to play in that ethos, particularly at a time of rapid technological change and amid the challenges of a climate crisis. Without diverse teams to tackle these challenges, we are unlikely to find the best solutions for the way forward. The growing call for more female Chairs setting the tone at the top of our biggest companies must be taken forward through collaboration.

Warnings on the lack of diversity are sounded all the time. There was one the other day, when the British sport sector was accused of an "unacceptable" lack of ethnic diversity across its boardrooms.

Research by UK Sport and Sport England revealed that black, Asian and minority ethnic (BAME) people account for just 5.2% of board members in 130 organisations they invest in despite statistics showing around 14% of UK population is BAME.

"While the greater representation now being seen of women on boards is welcome, the overall picture of diversity in its broadest sense is completely unacceptable and requires practical action and greater, faster change," said Nick Bitel, the chairman of Sport England.

If you use social media regularly as a form of intelligence as well as interaction, you soon find that for each of these ‘lack of diversity’ stories there is pushback from individuals and organisations saying ‘but we are here, and we have the potential candidates.’ It is the disconnect we next need to address, which is why we need better collaboration. There should be an update on that soon on my independent blog, Board Talk.

Tech challenge

The other lens with which we need to view diversity urgently is one of technological change. This story highlights the dangers of moving forward into uncharted territory with artificial intelligence and algorithms created by teams that are not diverse. We will replicate groupthink ad nauseam if we are not careful, just as we begin to redefine Profit and Purpose for every business.



The unravelling of Thomas Cook has again highlighted the need to find a way to get better accountability from those who run businesses and reap the benefits but are protected when those businesses collapse, leaving human wreckage by way of lost jobs and an uncertain future.

Business secretary Andrea Leadsom is reported to have asked the official receiver, which oversees liquidations, to look at whether the actions of top directors "caused detriment to creditors or to the pension schemes". The regulator, the Financial Reporting Council (FRC), is also considering an investigation. The government had already announced a fast track inquiry into the collapse by the Insolvency Service, and is working on the repatriation of stranded tourists.

But the collapse has once again placed a spotlight on the extent of inequality in the country – which does nothing for trust - and is a reminder of the flaws of limited liability.

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