At Legal & General Investment Management (LGIM), we believe cognitive diversity in business – the bringing together of people of different ages, experiences, gender, ethnicity, sexual orientation and social and economic background – and harnessing such diversity is a crucial step towards building a better economy, society and companies. So, we are using our position to engage with companies which could be doing more, and will vote against the companies which don’t meet our expectations.
We’ve made good progress in improving the gender balance of companies, through engagement, voting and investment consequences. The UK’s biggest 100 companies are on the brink of hitting 40% female representation at board level, with the FTSE 100 average at 39.9%, as of March 2022.
To most of us, the benefits of a diverse workplace seems obvious. Morally and socially, encouraging diversity creates a more inclusive world. But it can have huge benefits for business too, particularly in a time when competition is fierce, as Clare Payn, Senior Global ESG and Diversity Manager at LGIM explains: “It means we have the best people and the best talent in all teams and at all levels in a business, to ensure that business is sustainable for the future. We’ve got to have that balance to avoid group think, and to avoid risks and opportunities not being considered.”
If you’re only selecting from 50% of the population, how are you going to select the best people? It’s not statistically possible.
We still come across businesses questioning the benefits of diversity in business, claiming that people should be hired and appointed on merit alone. “Our answer to that is that they absolutely should be appointed on merit, but you’re more likely to appoint on merit if you broaden your talent pool,” explains Payn. “If you’re only selecting from 50% of the population, how are you going to select the best people? It’s not statistically possible.”
As an employer, we’re working towards a more equitable workplace where all our people can realise their potential. We believe that diversity of experience brings diversity of thought and perspective, which in turn drives greater proximity to customers, better-informed decisions, and a culture which more readily embraces innovation.
Diversity and Inclusion is a core pillar to the way we operate and do business at Legal and General. Our aspiration is to build a more diverse workforce and an inclusive, equitable culture where we can all get ahead.
Our success depends on a strong and resilient society; to play our part in building this, we need to ensure that we role-model responsible business practices. Our impact is far-reaching, and strong business ethics are key to making that impact positive.
Our people strategy is based on building a thorough understanding of the 11,500 colleagues who work here. Understanding our workforce helps us to meet the needs of our people today. It enables us to support their wellbeing, offer them learning and development opportunities, take steps to build a more inclusive workplace, and engage them on issues that matter to them.
Core to our commercial success is a culture in which our people act in line with our expectations of their behaviour. We define our culture as one in which employees act in a straightforward, collaborative and purposeful way.
As an employer, we seek to develop our people and diversify our workforce and, to do this, we must first understand our people. We regularly track and analyse our people data, using it to set meaningful targets which will drive positive impact throughout the organisation and improve how we do business. At the end of 2022 82% of our people trusted us with their ethnicity data. We strongly believe that transparency is key to making progress on the importance of diversity in business.
We continue to make strides towards a more equitable workforce. We have also set internal goals for the representation of minority ethnicities on our Board, in our senior management population and across our workforce as a whole. These goals are stretching, but we’re realistic about what we need to do to meet them and are concentrating our efforts to get there. Currently 25% of our Board is ethnically diverse.
Our vision, the action plan and measuring our progress are the responsibility of our Global D&I Council, which reports to the Group Board and is chaired by Laura Mason, CEO of our capital investment business.