Diversity on boards and in hotel industry leadership contributes to better decision-making and, ultimately, higher profits, according to panelists at the recent UKHospitality Summer Conference.
LONDON—The presence of a diversified board leads to better decisions, more innovation in management and, ultimately, to higher profits, according to speakers at the recent UKHospitality Summer Conference.
During a panel discussion titled “People and diversity,” Holly Addison, principal at executive search company Odgers Berndtson, said gender diversity on boards has been shown to increase financial returns.
“For every 10% increase in gender diversity, (earnings before interest and tax) rose 3.5%,” she said.
A hotel firm’s reputation also is at stake, more notably in a new era of inclusiveness and social media, panelists said.
Panelists, who noted previous conference panels consisted entirely of men, said the movement toward more women in the C-suite and on boards has ramped up, but there is still much to do.
“Twenty-nine percent of (Financial Times Stock Exchange’s) 100 board positions are now held by women. However, 40% of FTSE350 board places need to go to women by 2020 to meet the target of 33%,” Addison said, referring to the United Kingdom government’s October 2015 report and recommendations titled “Improving the gender balance on British boards.”
Addison added there is still a not-in-my-backyard attitude toward the subject.
“Only 47% of those questioned who think there is a problem in general regarding diversity in the boardroom thought there was a problem in their own companies, and while 64% said they had no mentoring scheme for women, 65% thought mentoring was a good idea,” she said.
More diversity can only provide benefits, according to Serena von der Heyde, owner of London’s Georgian House Hotel.
“Gender-balanced boards make better decisions,” von der Heyde said.
Angela Malik, government advisor and a board member of the Mayor of London Sadiq Khan’s Food Board, said boards must look more like their customers, and in multicultural societies that means having diverse members.
However, board diversity should be well-thought-out, and not just diverse for the sake of it, panelists added.
“You cannot plead that more women are needed on boards because it is fairer. It has to be about performance, but finding data on this is hard,” said Jon Terry, U.K. diversity and inclusion consulting leader at business consultancy PwC.
“A lot of woman on boards, when replaced, are replaced by non-executive board members, which helps the numbers but is not the same,” said Catherine Roe, chief executive of food contractor Elior Group and chair of the Woman of the Year event. “Diversity is essential for what everyone on the board can offer. It simply allows a wider assortment of ideas.”
Terry said another argument for diversification is the public face a company wants to show.
“In an industry where reputation means everything, mistakes go straight to the experience and the bottom line. Businesses must look like their customers,” he said. “There is a significant amount of evidence of the benefits of diversity, and not just on performance but on innovation. But if you want to ignore this evidence, then this is about risk and reputation.”
Terry added millennial attitudes also play a part in the new thinking.
“That group of talent does not want to work in a place that does not look like them,” he said. “Eighty-five percent of millennials say they will not work for a company that does not add up to being an inclusive workplace, so those of us saying we need more diversity are not making enough fuss.”
Von der Heyde said a new company should begin to look at and form more diversified management right from the start.
“Develop talent at the earliest stage, and this is the point that we have to ask ourselves do we have the right balance,” she said.
Roe said barriers for women still exist.
“What are the inhibitors to women? A lack of confidence?” she said. “That is where mentoring comes in, which is vital, as I do not want to get to the situation where I am hiring women for the sake of hiring women. And I am conscious of not being biased against men.”
Terry said another barrier is that “the way skills and abilities are looked at and defined are too often decided upon by men,” but “someone who has the same skills as those already on a board is going to add very little to that board.”
Panelists said the hospitality industry’s long hours and multi-location workplaces also can be a barrier to women.
“Frankly, they can be easier for men to deal with,” Terry said.
Von der Heyde added that, despite these barriers, women still “have a huge opportunity,” because “this is the generation where things change.”
Addison encouraged women to have more self-belief and seek out those around them who will give them that encouragement and the necessary push forward.
“Sixty-five percent of men will speak themselves into a job; 95% of women out of it. That is a sweeping statement but somewhat true,” she said.
“It is okay to ask for help. You do not have to do it on your own,” Malik added.
“Have confidence and go for it, but first do the work, and choose the right company,” Roe said.