Broking Business – Summer 2022
Equality, Diversity and Inclusion (EDI) is not just about box ticking. Jessica Wills explains why the insurance sector cannot succeed without it.
EDI is an important aspect of organisational culture. And good culture, we might say, is one of the key elements of a successful organisation. But recent news is full of organisations failing to get this right. The cost and reputational damage of cultural failures for organisations, and also individuals, can be severe.
A recent case of poor culture was Lloyd’s issuing their largest ever fine (over £1m) to Atrium Underwriters because of instances of non-financial misconduct. These were evident as having taken place over a number of years which, in Lloyd’s view, precipitated a culture which tolerated instances of unacceptable conduct involving discrimination, harassment and bullying. Lloyd’s bulletin on this matter can be found here if further reading is of interest. The reputational damage arising from this may yet to be fully felt.
EDI and good culture
As an internal auditor my instinct is to get to the root cause of issues. But in this case there seem to have been multiple failings that led to a culture where individuals felt empowered to behave inappropriately. Poor training, lack of focus on EDI, inadequate disciplinary procedures, failure of leadership – or some combination of these factors – may lead to poor organisational culture.
Organisations with high awareness of, and provision for, EDI tend to have a good overall culture. Staff at every level of an organisation are responsible for making it welcoming to all and representative of the community it serves. But not all organisations put adequate emphasis on EDI. Pressure therefore needs to be applied to such organisations to act.
Regulatory emphasis and new priorities
Western economies are shifting from shareholder to stakeholder capitalism. This means there is now more and more governmental and regulatory intervention in organisational make up. A few years ago gender pay gap reporting became mandatory for large employers in the UK. Ethnicity pay gap reporting is rumoured to follow shortly.
The FCA is proposing measures to improve transparency on the diversity of boards and executive management, for investors and other participants in the market. New entrants to the job market are more and more socially conscious, with many Millennials and Generation Zs already making decisions about their careers based on their values. Generation Alpha is set to follow this trend, so organisations need to be proactive if they want to attract top new talent.
Action at Lloyd’s
Poor organisational culture and lack of diverse representation among employees are key risks to the running of a successful business in the long term. Lloyd’s as a corporation and a regulator appears to be taking action to help both carriers and intermediaries to mitigate these risks.
The business case for inclusivity has, by now, surely been presented at every board of every firm in the insurance sector. Lloyd’s principles for doing business include a culture element, which states that Managing Agents should be inclusive, creating a diverse high-performance culture. Recent appointments of Sara Gomez (Chief People Officer) and Mark Lomas (Head of Culture) at Lloyd’s, look set to increase the focus on culture within the market.
Support from partners
There is plenty of support for firms at every stage of their EDI journey. The annual Dive In festival is a good place to start (27-29 September this year). Dive In is a global movement in the insurance sector that supports the development of inclusive workplace cultures. It offers plenty of educational opportunities, and a safe space for debate and networking opportunities.
There are six market-wide partner networks (or ERGs – employee resource groups) that focus on various aspects of inclusivity. They are GIN, Link, IFN, iCAN, NGIN, and iDAWN. If you have not already signed up, I would strongly recommend getting on their mailing lists. These ERGs are supported by the Inclusion@Lloyd’s board, a governing body made up of senior executives representing the companies and membership organisations within Lloyd’s and the wider insurance market.
I have the privilege of serving as Treasurer for iCAN – Insurance Cultural Awareness Network. We are the industry-wide, independent, volunteer-run network that supports multicultural inclusion across the insurance sector. We promote progression, engage with allies, and celebrate the benefits of inclusion and diversity in the industry.
All of these organisations have brilliant initiatives and are ready to help anyone at any stage in their EDI journey.
Getting assurance on culture
PKF’s Governance, Risk & Control Assurance team helps organisations by independently and objectively evaluating their internal controls. We play an important role in helping our clients not to suffer the ill effects of poor organisational culture and lack of diverse representation in their employee population.
We have supported some of our clients by carrying out focused culture or HR reviews. The reviews typically look at policy or strategy and include staff interviews or surveys. These help us form an opinion on how the culture message is being filtered from the top down. For some of our clients we have also incorporated a cultural assessment into every review.
For more information, or to consult one of our experts, please contact Jessica Wills in our London office.
