Say what you will about Goldman Sachs, the company goes with the current. So when it starts to renege on DEI (Diversity, Equality and Inclusion) initiatives, we should, I think, take note. Previously the firm’s policy had been only to take to market companies which had two ethnic minority board members, one of them a woman; now it’s dropping that requirement. One reason, says the company, is that it’s job done; boards are already sufficiently diverse so their diktat isn’t needed to bring about change. It must have been an interesting time to be an ethnic minority female corporate bigwig, being chased by umpteen companies to diversify their boards.
America is joyfully following Donald Trump’s lead. Will the UK follow suit?
The reason Goldman Sachs is not giving for the move is the influence of Donald Trump. The President has made clear that the carnival is over for the DEI enforcers; it’s not going to be a reason to recruit or retain staff at government level, and corporate America is joyfully following his lead. Deloitte’s, the London based global accountants, is dropping the insanely annoying policy of requiring staff to provide their preferred pronouns. All small stuff, but all blowing in the same direction.
But the question is, will the UK follow suit? Goldman Sachs has a collective policy on governance for the US and Europe, so the UK is on this front, simply being drawn into the US current. Jason Tarry, the chairman of John Lewis, told my colleague, this paper’s business editor, Jonathan Prynn, that he has no intention of backing down on the diversity and inclusion stuff, because it’s part of what he sees as the company’s identity. Other UK businesses may decide that they too will stick with the project, especially as young people rather like it.
Corporate women from the same sort of background as corporate men may be useful, but someone from a working class background, including white men, could add a different perspective altogether
We should, I think, make a distinction between the HR box-ticking that actually impedes companies from getting on with their job of making things and getting people to buy them, or selling services, and the larger issue of what makes a good board. There has been for the last couple of decades increasing awareness that it’s good for business if boards are diverse, since they will have that useful variety of outlooks which makes for good decision making. I’d say myself that a bit of social diversity would do no harm either – corporate women from the same sort of background as corporate men may be useful, but someone from a working class background, including white men, could add a different perspective altogether.
Anyway, Goldman Sachs may have a point when it says that there is already progress on the diversity front. In the UK at the end of 2023, 96 out of the FTSE 100 companies had ethnic minority board members. Even more interestingly, there were a dozen ethnic minority CEOs in the FTSE 100 and a fifth of all directors were from an ethnic minority.
As for women, at the end of last year, 174 of the FTSE 250 companies had at least 40 per cent women on their boards. In 2022 there were 21 women CEOs – in the top job – in the FTSE 100. But as our business editor also points out, in many companies, women directors tend to gravitate to softer elements of the business – marketing or recruitment (sorry, sorry, but there it is) – rather than say, Chief Finance Officer. But by any standards, this is a genuine shift in corporate identity and I would guess it’s driven by business pragmatism as much as enforcement.
Me, I can’t wait to see public bodies, including the BBC and publicly funded arts bodies, follow suit and abandon their stupid email signoffs, which does nothing except to annoy recipients (well, me). I would be very glad if every institution appointed people to jobs on that old metric, merit, rather than on the basis of DEI. In short, I think Donald Trump is onto something. But it’ll take far longer for the cultural rollback to happen here. I am prepared, for instance, to put a fiver on a woman being the next Archbishop of Canterbury – not because the women clerics are particularly holy, but because the CofE is captured by ideologues concerned with the same tired pieties. I think it’s time for cultural change, for HR to be put back in their box and the lid slammed shut. But, this being Britain, I bet it won’t happen soon.
Melanie McDonagh is a London Standard columnist
