We count women, but not diversity
There are hardly any top executives with a multicultural, non-Western background in Norwegian business, but it is still only the proportion of women and men that is mentioned in annual reports. It is high time that companies and organisations also disclose the number of minorities in their leadership teams.
The state of diversity in Norwegian leadership teams is disheartening. PA Consulting’s recent survey of the leadership teams of the 50 largest companies in Norway reveals that only 0.22 percent, or 1 out of 459 leaders, have a multicultural, non-Western background. This is a decrease from a similar survey in 2019. The situation is not much better in the public sector, where the proportion with a multicultural non-Western background is 0.77 percent.
The paradox is that “all” companies and public entities have stated that it is important to focus on diversity in leadership teams. It is stressed that it provides more innovation and new perspectives to adapt to changing needs and desires of customers, users, and target groups. Diversity of input, thoughts, and viewpoints in a leadership team can lead to a better decision-making process and more holistic solutions. Where there is uniform thinking, there is often little thinking. The lack of diversity negatively impacts employees who may feel less connected and less represented in the workplace. This, in turn, can affect productivity and engagement among employees.
So why is it so difficult to address this in a country where there are over half a million people with a different ethnic background? One challenge is that it is not measured.
The Equality and Anti-Discrimination Act aims to promote diversity and equality. In the so-called duty to report on activities, which was expanded and strengthened in 2019, all companies with more than 50 employees are required to actively work for equality and prevent discrimination. The annual report should also include a gender equality report, i.e., an overview of women in leadership positions. At the same time, there are no such requirements to report on the percentage from minority backgrounds. No annoying audit personnel come to the office to ask about the percentage of leaders with a multicultural background, as happens with the gender ratio. Larger companies also avoid critical questions from journalists who have scrutinised the annual report for potential conflicts. What is not measured is therefore more difficult to criticise.
In Norway, we have had an exemplary focus on women in boardrooms. But in the diversity debate, countries like the USA and England have come much further. There is much more discussion about diversity based on both gender and cultural background. In the USA, Nasdaq has introduced a rule requiring all boards to have at least two members with diverse backgrounds. At least one member of the board should be a woman, and at least one should be from an underrepresented minority. If, against all expectations, they do not meet these requirements, they are obliged to explain why.
Let me also emphasise that there are challenges associated with measuring the numbers of multicultural employees in Norway. Unlike in the USA, we are not allowed to ask about ethnicity during hiring. This can be solved, for example, by making first language a factor that is measured, but this does not capture, for instance, multicultural individuals born in Norway with Norwegian as their first language. A thorough examination of what is an appropriate measure should therefore be conducted.
It is also important to point out that measurement and facilitation alone are not enough to increase the percentage of multicultural leaders. Minority communities themselves also have a responsibility to be competent and attractive candidates for leadership positions. Too often, so-called ALI studies, i.e., lawyer, doctor, or engineer, are the subjects’ minorities choose to study in Norway. It is important that individuals with a multicultural background dare to challenge traditional educational paths and seize opportunities when they are presented. It is essential to think more broadly and choose fields like economics, management, and strategy that are relevant for leadership positions.
There are plenty of speeches about diversity and equality. By legislating so that Norwegian companies and organisations must include the percentage of leaders from minorities in their annual reports, Norwegian leaders will have to reflect on the diversity in their organisation in a completely unique way. Just as having a leadership team consisting only of men is no longer socially acceptable, awareness of our own company’s diversity will push us in the same direction.