Social mobility: The part of the Corporate Governance Code everyone’s forgotten about

On 8th March the Board Intelligence Director Community partnered with KPMG’s Board Leadership Centre to host an event exploring social mobility in the boardroom. We were joined by a panel of business leaders, made up of Sherry Coutu (NED Pearson PLC, Raspberry Pi and Chair Workfinder), Tim Copnell (Founding Chair KPMG’s UK Audit Committee Institute and Board Leadership Centre), and Bushra Ahmed (board member at Lloyds Bank Foundation & Home-Start UK). Our panellists shared their powerful stories of coming from lower socioeconomic backgrounds, and related their experiences in education, their careers, and board recruitment processes.

What is the state of social mobility in the boardroom today?

The UK Corporate Governance Code states that board appointments should “promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths”. However, recent research by KPMG reveals that 84% of respondents say that their board either doesn’t measure or know the socioeconomic background of its members. Shockingly, just 6% said that their board was aware of this information. This tallies with research by the CMI, who found that 80% of respondents said their organisation did not measure or know the socioeconomic background of applicants.

Not only are the vast majority of boards blissfully unaware of this, the proportion of board members coming from working class backgrounds is startling at only 15% - compared to the 70% who came from a professional background. Research by The Bridge Group revealed that the proportion of people from lower socioeconomic backgrounds in senior roles within financial services is even more skewed, with almost nine in ten senior roles held by those from higher socioeconomic backgrounds.

What challenges do people from lower socioeconomic backgrounds face?

One of the main challenges faced by those from lower socioeconomic backgrounds is the fact that they have much more limited access to the networks and mentors that are powerful enablers to those looking to enter the boardroom. KPMG’s study revealed that 67% of respondents had benefited from access to networks and mentors, revealing their crucial importance in giving people the direction and supporting them on their journey to the boardroom.

Another obstacle in the way of social mobility is the unequal progression experienced by those from a lower socioeconomic background when compared to their more privileged peers. In research from The Bridge Group, it was revealed that those from lower socioeconomic backgrounds took 25% longer to progress through grades, despite there being no statistical evidence to explain this in terms of performance. The result of this has been a deficit in the number of managers from lower socioeconomic backgrounds when compared to the UK working population. Research by the CMI suggests that, in order to achieve equal representation with the UK working population, an additional 420,000 managers from lower socioeconomic backgrounds are needed.

How can we drive change and make a positive impact?

There are many things we can do to boost social mobility and equalise access to opportunities for those from lower socioeconomic backgrounds:

1. Collect data – and ideally set targets. Some 69% of respondents to KPMG’s research said that their nomination committees had not addressed socioeconomic background in their succession planning, and 92% of respondents said that they were not asked about their socioeconomic background at any point in the recruitment process. This suggests a near-total lack of prioritisation of socioeconomic background, especially when compared to other diversity traits. As a priority, nomination committees should track socioeconomic background as, ultimately, you will never have an impact on something that you aren’t measuring in the first place. Additionally, organisations could implement targets for social mobility. As our panellists pointed out, these targets have worked well for other diversity characteristics – and would provide a similar boost to social mobility in the boardroom. You should build social mobility into existing diversity and inclusion frameworks, accompanied by a robust plan to meet goals.
2. Advertise apprenticeships and work experience openly. At the very least, work experience opportunities should be available publicly rather than through the network of those known to current employees. Even better, would be for the work experience opportunities to be targeted to those from lower socioeconomic backgrounds– perhaps partnering with local schools. In addition to work experience, organisations could offer apprenticeships as these provide vital routes for those who have not attended university.
3. Talk about it. As our panellists pointed out, a necessary first step is to get comfortable talking about socioeconomic background, which we’re often not here in the UK. Representation matters, but as we can’t see socio-economic background, it’s not immediately obvious. At Board Intelligence we’ll be profiling board and ExCo members from across the FTSE 100 and 250 who are from a lower socioeconomic background – if you are, or know of someone who would be happy to share their story, please let us know.
4. Show commitment at board level. In order for progress on social mobility to be made, there needs to be a clear demonstration of commitment right at the top of the organisation. Boards should ask questions of their organisations – particularly the Chief People Officer / HRD of how social background is measured and what is being done to address it. This can be clearly shown by, for example, connecting executive and leadership compensation with demonstrable progress on social mobility and other diversity metrics – as is already being done in some parts of the FTSE 100.
5. Democratise the recruitment process. People from lower socioeconomic backgrounds can be deterred from applying due to preconceptions around the hiring process for boards and may feel that they don’t have the ‘right background’ to work on boards. When engaging with executive search firms, ensure that they are considering the socioeconomic backgrounds of candidates when they provide shortlists – and make it clear that failing to do so will result in your organisation looking elsewhere for help. And ensure the language of the advert shows that you welcome those with lived experience as well as university degrees (if you do). And for the wider organisation, consider the recruitment platforms you’re using – those such as Workfinder control for socio-economic background in all shortlists.
6. Ensure your board is a welcoming place for all. During the recruitment interviews, and once appointed, the sense of “I don’t belong here” was strong for all our panellists at various stages of their careers. This was exacerbated by in-jokes, insensitive comments, and chairs who didn’t proactively invite everyone to contribute to the discussion. And the inverse was immensely powerful – our panellists talked of non-executive directors who actively welcomed them into conversations in boardroom settings or networking events, flattering their technical expertise so others knew they had their backing. Ensure that your board is one where the atmosphere breeds collaboration and everyone feels welcome and is able to contribute their best.
7. Push for wider change. Making changes at board level is only part of the solution to tackle social inequality. Positive impact could be made through pushing for government incentives to promote social mobility; for instance, tax breaks could be offered to individuals and organisations that participate philanthropically to funding university places for those who would not otherwise be able to attend due to their socioeconomic status – as is done in the US. If you would support this idea please let us know as we will be doing further work in this area.

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