The National Equality Standard is a new business-led initiative that measures diversity and inclusion within UK businesses. Matt McAllister speaks to two key figures behind the Standard to find out why equality is a business necessity
“I think we’re on the verge of making a fundamental difference to business,” says Arun Batra, director of advisory at Ernst & Young and CEO of the National Equality Standard. “The time is now right.”
Batra is discussing the National Equality Index, a new initiative that measures diversity and inclusion within UK businesses. The Standard helps businesses comply with their legal obligations, shows them where they stand compared to other businesses within their industry, flags up areas that they need to work on and celebrates the leaders in the field.
It’s a project Batra has been spearheading ever since he was involved in developing a diversity standard for London when he worked for the Greater London Authority. The project evolved into a business-led initiative for the entire country, and Batra has spent over year working on the content of the Standard.
The initiative has the backing of the Equality and Human Rights Commission, the Home Office and the CBI, and the board includes Trevor Phillips, the former chair of the Equality and Human Rights Commission. But UK businesses have also been instrumental in the research and development of the Standard, and it has been funded by Ernst & Young and 20 other major organisations, including BT, Microsoft, Tesco and RBS.
David Bell, former director at Pearson and chairman of the Standard, says that this “by business for business” approach is crucial to its success.
“The Standard has grown from the bottom upwards, and that means it’s rooted in what business thinks it can and should do,” says Bell. “There’s a growing realisation within business that good companies need to focus on these issues. The issue has been how do they benchmark themselves? We thought the only way to set out the parameters of the Standard was to ask the businesses who had been complaining about the lack of clarity in D&I to help us develop it.”
Batra and Bell acknowledge that this isn’t the first D&I initiative, and say that the Standard isn’t meant to undermine those. But, says Batra, their new Standard reduces the ambiguity, complexity and bureaucracy that makes it difficult for companies to tell how they’re doing compared to other businesses. He says that while the Standard is “rigorous” it is also easy to understand.
One of the reasons that the field of D&I has been so complex is that companies have vastly different challenges and issues depending on factors like industry, size and location. Batra acknowledges this, but says that the Standard was always designed with this in mind.
“What applies to the construction sector doesn’t apply to, say, the hospitality sector, so that’s why the board is from a cross-section of industries,” he says. “In construction there are around 2% women; in hospitality it’s around 60%. So we want to be relevant and proportionate across the business community. When we audit we compare an organisation to companies within the sector – you’ll know where you stand within your sector over things like flexible working policies and equal pay.”
We thought the only way to set out the parameters of the Standard was to ask the businesses who had been complaining about the lack of clarity in D&I to help us develop it.
Bell adds that the Standard also takes into account the differences between an SME with 250 people and a large company, as well as the location of a business. “It makes no sense to apply the same standard to a business in Cornwall, where there might be a small number of people from minority background, to a business in London. So we take account of that. But we would still want to see evidence that within the context of the location the business was conscious of issues and moving to understand how to deal with them.”
As it’s a voluntary initiative, there are no penalties for companies that fail to score well. But as Bell points out, the fact that a company has decided to sign up to the Standard suggests they’re serious about knowing how good or bad their D&I policies are and want to do something to address any issues. Once they can see where they’re deficient, they can go and work on those areas – and then the auditors can come back three months later to see how they’ve progressed.
Yet Bell is keen to stress that it hasn’t been designed to censure businesses that aren’t doing well. “We’re not being judgmental – we’re not in the finger-point business, and business doesn’t respond to initiatives that try to catch them out,” says Bell. “We’re simply saying you can demonstrate that you’re on the right road by doing this.”
Bearing in mind that it is voluntary, it’s difficult to determine what the take-up will be like. But Batra and Bell say that the fact they already have a “pipeline of clients” involved and that major organisations have thrown their support behind it, means that the signs are good. Bell says that in five years time, he hopes to see the National Equality Standard stamp everywhere – a sign of a much-improved D&I landscape.
Bell and Batra say that a business-led standard is recognition that D&I makes good business sense, rather than it simply being an issue of compliance.
“There is still a suspicion of diversity and inclusion being a box-ticking exercise in some quarters, but I also think there’s been an increasing realisation that issues like this matter,” says Bell. “Morally, there is no doubt in my mind that it is right for a business to reflect the make-up of a society in which it operates. But leaving aside morality, it’s good business to reflect the society in which you operate too. These are your customers. These are your future employees. This is 21st society. So D&I is a no-brainer when you think of it like that – and this Standard will help businesses address this issue.”