Key learnings
- 84% of FTSE 350 boards don’t measure or know the socioeconomic background of their members, and 69% of their nomination committees don’t address socioeconomic background in their succession planning.
- 15% of FTSE 350 board members come from working-class backgrounds (vs 39% of the UK working population), and it takes people from lower socioeconomic backgrounds 25% longer to progress through the ranks despite equivalent performances.
- There are seven steps you can take to drive change — read on for more details.
With thanks to Sherry Coutu CBE (NED, Pearson, Raspberry Pi; Chair, Workfinder), Tim Copnell (Chair, KPMG’s UK Audit Committee Institute, Board Leadership Centre), and Bushra Ahmed (Board Member, Lloyds Bank Foundation, Home-Start UK), who shared their powerful stories of coming from lower socioeconomic backgrounds and how it impacted their board experiences.
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 FTSE 350 boards don’t measure or know the socioeconomic background of their members. This tallies with research by the CMI, which found that 80% of organisations don’t track the socioeconomic composition of their workforce.
Not only is that blind spot worrying, but it also has real-world consequences: the proportion of board members coming from working-class backgrounds is just 15% — compared to 70% from a professional background. And research by The Bridge Group shows that the ratio within financial services is even more skewed, with almost nine in ten senior roles held by those from higher socioeconomic backgrounds.
84% of FTSE 350 boards don’t measure the socioeconomic backgrounds of their members.
What challenges do people from lower socioeconomic backgrounds face?
One often-overlooked obstacle encountered by those from lower socioeconomic backgrounds is their much more limited access to networks and mentors. Whilst this may not seem to be such a challenge, 67% of FTSE 350 board members told KPMG that their own networks and mentors played a role in their journey to directorship — highlighting their crucial importance in both showing people the direction to the boardroom and supporting them on the way.
Another roadblock is the unequal progression experienced by those from a lower socioeconomic background compared to their more privileged peers. Per The Bridge Group, the former take 25% longer to progress through grades than the latter, despite no statistical evidence of performance differences. And this results in a startling deficit: findings from the CMI suggest that, to achieve equal representation with the UK working population, an additional 420,000 managers from lower socioeconomic backgrounds are needed.
67% of FTSE 350 board members got there with help from their networks and mentors.
How can we drive change and make a positive impact?
At our latest Board Intelligence Director Community event, we were joined by three business leaders who came from lower socioeconomic backgrounds: Sherry Coutu CBE (NED, Pearson, Raspberry Pi; Chair, Workfinder), Tim Copnell (Chair, KPMG’s UK Audit Committee Institute, Board Leadership Centre), and Bushra Ahmed (Board Member, Lloyds Bank Foundation, Home-Start UK). They suggested seven things every organisation should be doing to boost social mobility and equalise access to opportunities.
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Collect data — and set targets.
69% of respondents to KPMG’s research said that their nomination committees do not address socioeconomic background in their succession planning, and 92% said that they were not asked about their socioeconomic background at any point in the recruitment process, which suggests a near-total lack of prioritisation of socioeconomic background when compared to other diversity traits. And since we can’t impact something we aren’t measuring, nomination committees should make filling that information gap a priority.
Additionally, organisations could implement targets for social mobility. As our panellists pointed out, targets have worked well for other diversity characteristics in the boardroom and would provide a similar boost to social mobility. You should build social mobility into existing diversity and inclusion frameworks, accompanied by a robust plan to meet goals.
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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. And in addition to work experience, organisations should consider offering apprenticeships, as these provide vital routes for those who have not attended university.
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Talk about it.
Representation matters, but as we can’t see one’s socioeconomic background a necessary first step is to get comfortable talking about it — which we’re often not, at least here in the UK. How you openly discuss the subject will depend on your organisation, but we can all help bring the topic into the spotlight.
At Board Intelligence, we’ll be profiling board and ExCo members from across the FTSE 100–250 who came from a lower socioeconomic background — if you are, or know of someone who would be happy to share their story, please let us know.
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Show commitment at board level.
As with most things, social mobility won’t improve without a clear demonstration of commitment right at the top of the organisation. Boards should be asking questions of their organisations — particularly the Chief People Officer / HRD — of how social background is measured and what is being done around it. And how seriously you take the matter can be evidenced by, for example, connecting executive and leadership compensation with verifiable progress on social mobility and other diversity metrics — as is already being done in some parts of the FTSE 100.
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Democratise the recruitment process.
People can easily be deterred from applying for a board position due to preconceptions around the hiring process and feeling that they don’t have the “right background”. So, 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.
Another easy step is to also 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 socioeconomic background in all shortlists.
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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. 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, or commented on 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 can contribute their best.
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Push for wider change.
Making changes at board level is only part of the solution to tackle social inequality. Positive impact can also be made by 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.
Although organisations have been making progress on diversity as a whole, social mobility on boards is the next step that needs addressing — and from the dire stats unearthed by recent research, it is an area the regulator should soon become more interested in. Forward-looking boards and nomination committees should act now to improve social mobility within their own organisation and beyond.
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