In part 1 of this blog, I looked at three out of six issues I expect to be key for boards in the next 12 months – political and economic uncertainty; leading through crisis; and the continuing impact of AI and digital change. Read on for part 2.
Diversity and inclusion
If the latter months of 2022 are any indication, issues of diversity and inclusion are likely to be a dominant, and for some profoundly uncomfortable, theme in the year ahead.
In recent years, action on diversity has mostly been framed in terms of gender – addressing the disparities on pay, for instance, or building pipelines of female talent into the boardroom. It’s not by any means a matter of “job done” in those areas, but in 2023 gender issues are likely to take a bit of a backseat as issues of inclusion in general, and of race and culture in particular, come to the fore.
Organisations have been increasingly getting to grips with workforce diversity in its many shapes and forms. All too often, though, they remain either unaware or simply dismissive of inclusion. The inclusion argument, that organisations should strive to reduce tokenism or “othering”, eliminate structural or cultural biases and create an environment where people feel opportunities are there for everyone to access equally, regardless of difference, is too often dismissed as “wokeism” in practice.
And yet, the issue is everywhere. 2022 saw the culture wars get very heated as the Duke and Duchess of Sussex’s Netflix series re-opened allegations of racism in the royal household. Some repellent tabloid comments on the Duchess provoked a swift backlash, while the issue gained further charge with the controversy over Lady Susan Hussey’s questioning of charity head Ngozi Fulani at a Palace party in November. Fulani’s charity, Sistah Space, was forced temporarily to cease its operations following the backlash.
In the coming months the arguments over race and the crown look unlikely to die down. The Prince’s book, Spare, is already topping the bestseller lists and generating uncomfortable press headlines, while experts have warned of a "massive diplomatic grenade" being thrown if, as has been speculated, the controversial Koh-i-Noor diamond is worn at the coronation of King Charles III,
Meanwhile,the last few weeks of 2022 saw reports that Germany has returned 22 Benin bronzes to Nigeria, and that the British Museum is in talks with the Greek government over the Parthenon Sculptures. Such high profile repatriations suggest we will likely see increasing pressures to come to terms with Europe's colonial past in the months ahead. And, finally, the year sees the 75th anniversary of the arrival of the Windrush, the ship that brought a new wave of immigration to post-war Britain.
These are disparate issues, of course, but the debates about culture, difference and inclusion that have opened up will increasingly colour the environment within which organisations operate. Boards are almost certainly not going to be keen to engage on such sensitive issues, but they may find themselves increasingly out of step if they don’t.
Authenticity on ESG
Environmental campaign group Extinction Rebellion hit the headlines again in early December with the unexpected statement, “We quit”. It was, the group said, a temporary change in tactics away from the headline-grabbing disruptions of 2022 towards “building collective power, strengthening in number and thriving through bridge-building”.
Climate activists may be reviewing their tactics but the challenge of sustainability, environmental, social and governance (ESG) – whatever you want to call it – has been on many a board agenda for several years now and is here to stay.
One of the big messages from COP27 and its predecessors has been that while the West talks a lot about climate change, the biggest brunt has mostly been borne by smaller, poorer nations. That may finally have changed in 2022 as the US, Europe, China and southern Asia, even Australia all variously experienced record-breaking temperatures, drought and excessive rainfall. Even the UK saw an all-time high temperature of 40 degrees in July, punctuated by heavy downpours. In December, a massive Arctic winter storm system left parts of the US shrouded in snow and ice while in parts of Europe all-time high winter temperatures left the French and Swiss Alps bereft of snow for the traditional skiing season.
All of this has underscored the point that organisations will need not just to talk about climate change but legitimately address the impact of their activities. The key word for 2023 is likely to be “authenticity”. Consumers are increasingly literate about what changing climate really means, not just for themselves but for communities the other side of the world. Together with investors, they are more and more preferring those businesses that can demonstrate their credentials on sustainability, and are savvy about greenwashing.
Regulators are also getting involved. In October 2022, for example, the Financial Conduct Authority (FCA) issued consultation paper CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels, which frames a package of measures to help consumers navigate the market for sustainable investment products, alongside new rules on disclosure.
For boards, rising to the challenge means genuinely getting to grips with the impact the organisation is having on society and the environment, and putting in place what may be ambitious plans for change, with transparency and accountability at the heart of it all.
Stemming the flow of talent
My final issue for the coming year is people. The last twelve months saw continue trends that started in the wake of Covid for people to leave often quite senior roles and either set up on their own, take a step back from being “always on” or even leave the workforce altogether.
Working patterns in the wake of Covid have changed as workers have taken what they learned during lockdown about remote working, reassessed the impact of their jobs upon their lives and, in many cases, found it wanting. All sorts of catchy names have been coined to describe what are really different phenomena – the Great Resignation, the Quiet Quitting and so on. And according to the CIPD Good Work Index, published in June 2022, the trend is set to continue into 2023, with more than 20% of those surveyed saying they intended to quit their jobs within the next 12 months.
The economic outlook looks worse now than it did seven months ago, unemployment is expected to rise and some of those who were thinking of moving on may have decided to stay put. Nonetheless, concerns are growing about the loss of talent.
That poses some serious questions for organisations. Why are talented people leaving what are often well remunerated roles, and what can be done both to stem the flow and to attract talent back? It simply is not good enough anymore for organisations to shrug and say, “well, it’s not just us, it’s happening everywhere, nothing we can do about it”.
Increasingly the onus is going to fall on employers to ensure they are offering attractive careers to staff – current as well as incoming. For some, that will be measured in terms of better salaries, of course, but for many it will mean something quite different. It will mean work that is fulfilling, a sense that what one does is genuinely valued and that development opportunities are available – and the promise of a better work-life balance.
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