This article is by Sam Smith – CEO and Founder of finnCap
This week, as we celebrate Global Entrepreneurship Week, we would do well to consider what it is we are celebrating. Self-starters? Innovation? Courageous but calculated risk? In truth, the answer is probably all of the above, and much more besides. Entrepreneurship comes in many forms, and our entrepreneurial ecosystem in the UK ought to possess a vibrancy which reflects that.
However, there remains work to do. Our entrepreneurial community is not as inclusive as it could, or indeed should, be. A lack of inclusivity is not befitting of any modern workplace, but it is particularly disturbing when exclusionary attitudes inhibit aspiring entrepreneurs. Entrepreneurship is, to my mind, about new entrants, breaking down barriers, and disrupting the status quo in a positive manner.
Outdated lad culture
Therefore, it would seem counterintuitive to celebrate entrepreneurship without embracing all new entrants, breaking down all barriers, and disrupting the status quo within companies which, rightly or wrongly, is seen as a bastion of outdated ‘lad’ culture.
Truly embracing inclusivity means challenging problematic aspects of culture within businesses. Culture can be difficult to quantify, with only 37% of large companies (with annual revenue of $10bn or more) reporting quantifiable KPIs in this area.
In contrast, 59% report on corporate social and environmental responsibility, while 63% report on purpose and vision. This is interesting because the promotion of an inclusive culture is a key aspect of businesses’ social responsibility, while it is worrying to think that their vision may not include space for everyone.
Encouragingly, culture is a matter of increasing interest to stakeholders, including investors and employees. Businesses feel ever more obligated to be transparent about how they view their own culture and what they plan to do to improve it.
Hence we see companies like US tech firm Northrop Grumman taking steps in the right direction, with its representation of women in executive roles growing from 16% to 33% from 2018 to 2019, and that of people of colour growing from 11% to 18% in the same period.
Less encouraging picture
On the other hand, the data collected by the Hampton-Alexander Review over five years of investigation paints a less encouraging picture. As of October, 32 FTSE 100 companies have fewer than one third of their boardroom roles occupied by women, and the FTSE 250 and 350 perform little better.
In September, women made up 32.8% of board representation among FTSE 250 companies, while this figure was a similarly depressing 33.6% for the FTSE 350. Even more disappointingly, among FTSE 350 companies, only 32 women have been appointed to the role of Chair in the last five years, while the number of women CEOs over the same period is even lower.
When assessing these figures, businesses must bear in mind that culture cannot be summed up entirely on spreadsheets. Increasing the representation of different genders, races, and ages at senior levels is not enough, businesses need to ensure that they provide an environment in which everyone, regardless of their background, can feel comfortable enough to perform to the full extent of their ability.
This has been the aim at finnCap, where women make up 40% of our workforce without the need for quotas. Instead, we have focused on measures such as modernising our maternity leave policy to support mothers wanting to return to work.
After all, monitoring company culture is a matter of talent management. If people do not feel comfortable in the environment their company offers, they will eventually move elsewhere, and while this is equally true for workers from well-represented backgrounds, employers must realise the implications of neglecting underrepresented talent. When assessing talent from diverse backgrounds, they should stop at the talent.
They must recognise that increasing diversity at all levels of their business is not a tick-box exercise, but a product of a more effective recruitment strategy which will benefit their company. Adopting an inclusive culture, therefore, is fundamental to business success.
Big challenge ahead
I make these points merely to outline the scale and importance of the challenge ahead. The Hampton-Alexander review will publish its final report on women’s representation in February 2021, and though the picture is unlikely to change much between now and then, it is still the right time to start, or to continue, thinking about how to foster an inclusive atmosphere in entrepreneurship.
After all, what better time than Global Entrepreneurship Week, when we celebrate what entrepreneurship is, to decide what entrepreneurship should be. In doing so, we will pave the way for people of all backgrounds to disrupt the status quo in a positive manner, yielding benefits for ever more individuals, communities, and societies.