Why bosses are ‘getting nervous’ about the corporate diversity drive
Chief executives are beginning to realise that they didn’t quite think things through when first setting up their diversity, equity and inclusion (DEI) initiatives, according to a co-founder of one of the UK’s most active LGBT charities, Stonewall.
Simon Fanshawe, who was one of six activists to set up the group, has said he is increasingly seeing a shift in attitude over the role diversity schemes should have in corporate Britain.
“It seemed self-evidently right [in the past] but now they’re saying, ‘Actually I’m not convinced that a high-street retailer should take a position on anti-conversion therapy,” he says. “Because what’s that got to do with the price of beans?’”
It is a debate that is being had across boardrooms across the country, as HR chiefs admit among themselves that some of their peers have embarked on passion projects that have little to do with the workplace.
As some of America’s largest companies slash their DEI budgets, UK-based executives are scratching their heads over which way to go next.
Some worry that the advice they have taken on diversity could have misrepresented equality laws, placing little scrutiny on unaccredited external training providers.
Others fear that DEI teams are simply silencing anyone with a different opinion rather than seeking to improve the diversity of their employees.
Fran Itkoff, a 90-year-old woman from California who had volunteered for a multiple sclerosis charity for over 60 years, was told earlier this year that her services were no longer required after she told a colleague she didn’t understand why she needed to add the pronouns “she/her” to her email signature.
The National MS Society confirmed at the time that she “was asked to step away from her role because of statements that were viewed as not aligning with our policy of inclusion”.
The subsequent backlash prompted the charity to apologise for what it called a “mistake”.
The dismissal of an elderly volunteer sums up the HR dilemma that some companies now face as individuals take matters into their own hands.
It was all “DEI, jolly good” to begin with, notes Fanshawe, but few really considered how these programmes would work in practice.
The equality consultant believes that a lot of programmes are not effective or have been used as a “platform for activism”.
He thinks the charity he helped set up in 1989 has become part of the problem by demonising anyone who doesn’t agree with its gender policies.
“I’ve always said the problem for Stonewall is not what they campaign on but how they campaign,” says Fanshawe. “I’m fed up with being told by Stonewall that I’m the wrong kind of gay.”
Harry Potter author JK Rowling has previously criticised Stonewall for promoting transgender narratives to young children and has accused politicians of “snuggling up” to the charity.
The chief executive of one company with 750 staff acknowledges that this is “one of the trickiest areas in business right now because you’re damned if you do and you’re damned if you don’t”.
Organisations which link bosses’ pay to diversity targets, for example, are often praised by some and slammed by others.
The retailer Asos last year U-turned on such a policy following pressure to re-prioritise profits.
As companies turn away from some of their diversity policies, HR specialists worry that important conversations about improving diversity at work are being overshadowed by debates on sensitive areas, such as gender identity.
Such issues are often cast as a battle between right and left even though polls show that few approach the topic through a hyper-political lens. The most common starting point is one of compassion, according to a previous poll by the More in Common think tank.
“They understand that for many trans people life can be difficult and most think as a society we have a responsibility to make it less so. None of the people we spoke to, from across the ideological spectrum, saw the debate in terms of a battle,” the think tank concluded after polling 5,000 people in 2022.
Yet with employees being dismissed for advancing certain views on transgender issues and companies going to desperate measures for a spot on Stonewall’s annual equality leaderboard – such as removing the word “mother” from maternity policies – that sentiment is not necessarily reflected at work.
There are concerns that while DEI efforts can amount to little more than box-ticking in some cases, it is simply going too far in others.
Senior executives who want nothing to do with any of this will soon find themselves under the spotlight, some argue.
Neil Morrison, who is director of HR for utility giant Severn Trent, thinks DEI matters are about to become “everybody’s job” as companies change tact and slash spending in this area.
He expects more organisations to cut their DEI leaders and instead declare that “diversity is everybody’s responsibility”.
This shift is already playing out in America, where employers are removing diversity criteria for scholarship programmes after the US Supreme Court, dominated by conservative-leaning judges, banned race-based university admissions.
DEI initiatives overall are already slipping down the ladder of importance.
Zoom told staff earlier this year that it had dismantled its DEI team amid layoffs, which reflected a wider trend across the West.
Overall, the number of DEI jobs in America had shrunk 8pc during the first six weeks of 2024, data sourced by Revelio Labs and The Washington Post showed in February.
This stemmed from the likes of Meta, Tesla, Lyft and X all slashing their respective DEI teams by 50pc or more.
“I have spoken to a few people from the chief diversity officer (CDO) network in New York who have seen many CDO roles pulled mid-way through the recruitment process, when CEOs are getting nervous to continue headlining the function,” says Amanda Rajkumar, who was Adidas’s global HR chief and the sole female executive on its board before she left last year.
“I’ve also seen some CDOs who reported directly to CEOs go back to reporting to HR heads. Some feel the pendulum swung too far and there has to be a reset.”
Sensing the changes, UK-based chief executives and HR directors are looking for discreet advice. Tanya de Grunwald, who advises companies on HR issues, is putting together a roadmap for boardrooms which feel lost about what to do next.
Her list of issues that need to be addressed is getting longer by the day, she says, from lack of adequate legal training to workshops that never get scrutinised by a third party.
“DEI started with good intentions but it’s clear that not enough guardrails were put in place, making it vulnerable to politicisation,” says de Grunwald, arguing that there needs to be more nuance in the conversation.
Some feel that a major review into gender identity published by paediatrician Dr Hilary Cass last month has indirectly made a case for free speech and could give top executives the confidence to ask more probing questions.
Others could also be influenced by their peers in America, where the president of the country’s largest HR organisation, the Society of Human Resource Management, flagged in December that DEI policies will “come under full-out attack in 2024”.
That week, Elon Musk posted on his social media site X that “DEI must DIE”.
City investors disagree. One financier says he is on board with a DEI rethink but only if it doesn’t result in a shredding of vital diversity policies.
“It’s a pause for reflection,” he says, pointing out that it makes sense for bosses to now discuss where there might be pitfalls in their diversity plans.
“The meaty environmental, social and governance (ESG) stuff, such as climate change and inequality, still matters a lot. People who think this is part of a rolling back of ESG are wrong - it’s here to stay.”
As the conversation on how to navigate DEI gets louder, diversity consultants warn that any change won’t be easy.
Fanshawe worries that chief executives could be so afraid of rowing back on initiatives that many may well end up concluding: “Do you know what? It’s too much trouble.’”
