Unearthing a new layer of diverse leadership

It is now well established there is a business case for diversity - beyond it being the ‘right thing to do’. We know teams with different ideas, perspectives and backgrounds achieve greater profitability and innovation and more positive cultures.

According to McKinsey & Co, the relationship between diversity on senior leadership teams and the likelihood of financial outperformance is stronger than ever. But it seems ethnic and cultural diversity may matter even more than gender diversity.

According to the study, there is a “higher likelihood of outperformance difference with ethnicity than with gender”. It also found “a 36 per cent higher likelihood of outperformance on operating profit margin for top quartile companies for ethnic and cultural diversity on executive teams— up from 33 per cent in 2017 and 35 per cent in 2014”.

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Yet despite this compelling business case, there remains more CEOs in the ASX 200 named Andrew or Michael than those not from Anglo-Celtic or European backgrounds.

The Australian Human Rights Commission, in its Leading for Change report, found of the ASX 200 group of chief executives, 72.5 per cent have an Anglo-Celtic background, 23.5 per cent have a European background and 4 per cent have a non-European background. There is no one among the ASX 200 chief executive cohort who has an Indigenous background.

Despite those who have non-European and Indigenous backgrounds making up an estimated 24 per cent of the Australian population, such backgrounds account for only 4 per cent of ASX 200 CEOs and 5.8 per cent of ASX 200 executives.

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This is a familiar challenge for ANZ where, thanks to our geographical footprint across 33 markets, we have an incredibly culturally diverse workforce. But that diversity, disappointingly, isn’t reflected at many of our leadership tables. This is why improving the representation of culturally diverse leaders is a priority in our diversity and inclusion strategy.

“You can’t be what you can’t see” is a popular diversity catch-cry. The recent inauguration of Kamala Harris as the first (but not the last) female, Black, South Asian Vice President of the United States has emphasised the importance and power of representation and visibility.

The Leading for Change report identified four main ways organisations can strengthen professional development to unlock the potential of employees from culturally diverse backgrounds:

• identifying more diverse employees with leadership potential;
• providing better mentoring and sponsorship opportunities;
• empowering diverse employees;
• using networks to support diversity and inclusion.

ANZ’s cultural diversity and inclusion network, known as DIMES (Diversity, Inclusion, Mentoring, Excellence, Success), was established by our Head of International Segment Private Banking, Grace Bacon, and a group of employees who recognised an opportunity to bring people from different cultures together with allies to accelerate the progression of culturally diverse leadership at the bank while creating a forum for equal voice.

Since its launch in late 2018, DIMES has helped connect and empower employees from culturally diverse backgrounds through its mentoring program. Mentees are paired with leaders who provide mentoring and coaching support to help identify and develop those essential ‘soft skills’ required to advance in their careers.

Mentors also benefit from the program by developing increased understanding and empathy for the challenges faced by culturally diverse employees. Mentoring partners meet five to 10 times over a six-month period to discuss progress against previously agreed-upon objectives and provide advice on challenges. To date, 150 mentees have completed the program with approximately half of the first cohort progressing into more senior roles or securing internal secondment opportunities.

In 2019, ANZ sponsored Grace to participate in the University of Sydney’s Dr John Yu Fellowship program which aims to address the gap in leadership development for high-achieving multicultural professionals by enhancing participants’ strategic awareness of cultural diversity and leadership and building a network of likeminded colleagues.

Grace says the Fellowship reinforced to her that “visibility and representation are essential to achieve a monumental shift in the leadership landscape”.  Grace is passionate about mentoring and its power to accelerate careers. She sees mentoring as “a mutually-beneficial relationship where both mentor and mentee can gain personal and professional insights from their interactions through sharing experiences and knowledge”.

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ANZ is also proud to continue to partner with the Asian Leadership Project, and further our shared goals of increasing the representation of people from culturally diverse backgrounds in leadership, as major sponsor of its National Conference later this month.

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Fiona MacDonald is Diversity and Inclusion Lead at ANZ