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In line with the Financial Reporting Council’s (FRC) guidelines, organisations are reporting that merit is a priority when it comes to appointments.
Noteworthy, however, is where and how the language of merit as a priority is being positioned in Annual Reports. As researchers with the Cranfield School of Management we carried out an analysis of FTSE 350 reporting on ethnicity for the Parker Review 2020. We reported that diversity policies are commonly used to refer to the importance of appointments based on merit.
Across the range of organisations represented in the FTSE 350, commitment to increasing diversity is often stipulated with reassurance that the organisation first and foremost prioritises merit. We called attention to this positioning in the Parker Review. More recently we contributed to the analysis of corporate governance reporting by the FRC showing that, despite it providing an unhelpful narrative, the practice remains.
Positioning organisations as meritocracies implies that organisations operate in environments of social equity. Meritocracy may well be a value and a goal, but it is not a current reality. The practice of committing to greater diversity whilst reassuring stakeholders that the firm appoints on merit is unhelpful as it perpetuates a number of myths surrounding the value of having a diverse Board and organisation.
Some of these myths include:
Meritocracy and diversity are values that are ‘at odds’ with one another and cannot both be achieved simultaneously
The notion that meritocracy and diversity cannot go hand in hand suggests that to increase diversity some degree of sacrifice on performance or suitability must be made to accommodate this. The message that is delivered is one that those not in the powerful majority are ‘lowering the bar.’ To counter this, we offer the logic that a Board or workforce that is unrepresentative and non-diverse serves as evidence that the organisation is not operating a meritocracy, and that for an organisation to be a truly meritocratic it would be representative by its nature.
Underrepresentation of certain sociodemographic groups must be due to innate differences between these groups and those who are in the powerful majority
This myth asserts that if organisations prioritise merit in appointments and some sociodemographic groups remain unrepresented, there must be some innate differences between sociodemographic groups that warrant certain groups unsuitable for appointment. Alternatively, and more accurately, the overrepresentation of certain sociodemographic groups at Board level and in leadership positions can be attributed to an advantage afforded to those in the powerful majority who fit a narrow leader archetype, have greater access to social capital and are sponsored into positions of power. Thus societal, systemic and institutional factors (and chance of birth) are the cause of disparate outcomes.
Critical questioning of practices and policies is unnecessary to determine why there is underrepresentation because the organisation is a meritocracy
Finally, asserting that appointments are based on merit releases us from the additional responsibility of having to constructively debate the substance of the practices and policies that are likely to contribute to the underrepresentation of certain sociodemographic groups. However, to effectively scrutinise differential outcomes, there must be recognition that processes designed to uphold the status quo will sustain differential outcomes by continuing to privilege some in the powerful majority and disadvantage those who are outside of that group. We argue that critical questioning of all practices and policies is necessary to disrupt the myth of meritocracy.
We recommend that organisations move away from using meritocracy as a smoke screen for limited progress on diversity. Alternatively, we posit that for consistency, Boards provide public assurance in announcing every individual new appointment that those appointments were made on merit (i.e., not limit ‘reassurance’ to appointments of white women or all people of colour). Reporting would be much more aligned to organisations’ values if myths regarding the value of diversity were not perpetuated. Instead, we recommend that organisations recognise their shortcomings with respect to diversifying their Boards, leadership teams and workforces and report on actions taken, commitments and proposed solutions without the caveat of meritocracy.
With many organisations kickstarting their journey towards equity and inclusion, now is the time to review how you support the experiences and progression of your talent.