For any chief audit executives (CAEs) unsure of the need to embrace diversity in their teams, consider this: Diverse teams outperform non-diverse ones. According to data from management consultancy McKinsey, gender diverse teams outperform those lacking this mix by 15 percent. "If that doesn't get you on board with diversity and inclusion, then it might be time to rethink your approach to team management," says Kate Headley, director of talent management firm The Clear Company.
There are several ways that CAEs can take action to improve gender diversity in their teams. Linnea Texin, senior consultant at Corporate Citizenship, a management consultancy, suggests that firstly, CAEs should engage their teams to pinpoint the key issues that affect their ability to recruit, advance, and retain female talent, while also looking at wider, external issues, such as regional and industry trends.
Secondly, CAEs should ask key stakeholders — including executives, core team members, and customers — what key actions they feel the team should take to improve diversity. Thirdly, audit executives should set performance metrics and targets to check they are making progress. And lastly, the whole strategy should be well-communicated so that the whole team understands the rationale and is behind it. "More transparency helps build trust," says Texin.
Any successful approach to improving gender diversity will depend on attracting and hiring female talent, followed by developing, motivating, and retaining staff, says Patrick Voss, managing director at Jeito, a culture and engagement consultancy. Each requires a different set of activities to make it successful, says Voss — and he offers two simple options to help make it work.
"For those internal audit teams that are in-house and of a much bigger company, speak to the human resources team to see what initiatives they have in place to encourage greater diversity in the workplace. The chances are that a potential employee will be drawn by the company brand in the first place, so consider how the internal audit team can build on this."
Secondly, Voss advises asking members the audit team, as well as individuals outside the audit function, to describe the culture in three words. The response, she says, will help provide an idea of how internal audit is perceived. "Then speak to female colleagues and peers and assess their reaction to these descriptions," she adds. "If they suggest this sounds like an unappealing place to work, think about how you might shift this culture."
Stephen Frost, founder of Frost Included, a diversity consultancy, says that "gender bias" in departments and organizations can be reduced through conscious and more self-aware leadership, and through changes to the recruitment and appraisal processes. "A Harvard Kennedy School study found that a more diverse recruitment resulted when candidates were presented in groups, rather than one-by-one," Frost says. "Mixed interview panels are also important, and organizations like Goldman Sachs, Lloyds Bank, and KPMG now insist on at least one female executive in any panel when interviewing for senior-level recruitment," he adds.
Another method is to process applications and potential promotions purely based on skills and experience. Using a "name blind" policy will also help avoid discrimination not only by gender, but also by age, nationality, address, and any other information that has nothing to do with past successes and experience.
However, the key issue to improve inclusivity and performance within internal audit departments shouldn't necessarily be just about gender, Frost says. "For various complex sociological reasons you may also have women who actually manifest typically male attributes and attitudes, which is not the answer. Successful businesses need to create an environment that is genuinely diverse in its character and outlook, and it should challenge and counterbalance such stereotypical male values."
Experts also warn about confusing diversity with a "numbers game." Voss says that CAEs should not try to "set targets for target's sake." "Aiming for a 50/50 split is fantastic, but if it is unlikely to be reached, then aim for step-by-step increases that might be more manageable," he explains. "Think through where you currently are on gender balance and set yourself realistic targets based on the pool of talent you have access to and the marketplace."
Headley also says that it may be best to "forget about numbers" as they can "be detrimental to success." "In smaller teams, quotas can often be both harder to achieve and irrelevant in terms of the skills needed to carry out the job at hand," she says.
Research has shown that companies do not need to have a 50/50 split between men and women to achieve the benefits associated with gender diversity. In fact, The CS Gender 3000: Women in Senior Management, a 2014 report by financial services firm Credit Suisse, shows that even at the highest level of the organization, companies with just one female director achieved better share price performance than those companies without women during the previous six years.
"Embracing true diversity means focusing on the capabilities of the individual, rather than their gender, ethnic origin, social background, or any other demographic," Headley says. "This includes assessing a person's potential to develop the technical skills needed for the role, rather than their existing abilities. If your recruitment processes are inclusive, the by-product will be a truly diverse team."