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Boardroom Governance: The Everyone Economy 

June 2023


two wooden figures one holding 5 large blocks and the other holding 1 block

In recent years, the concept of social mobility has gained a lot of attention as organisations seek greater equality and inclusivity. 

It even warrants a day in June dedicated to promoting its importance for British businesses and The Chartered Management Institute (CMI) has called for the government to lead on driving inclusivity forward as a business imperative. 

The argument is that improving social mobility can significantly improve boardroom governance by promoting a diversity of perspectives and bringing varied experiences, knowledge, and insights to the decision-making process. 

This is the opposite of group-think, or echo chambers, and potentially enhances the quality of discussions and outcomes within boardrooms. 

While the term is used to describe a variety of situations, in essence social mobility refers to the ability of individuals to move up or down the social ladder based on their achievements, regardless of their socio-economic background, ethnicity or geographical location. 

In particular, it focuses on an area that is often not considered – those from economically disadvantaged backgrounds. 

CMI Reports on Inclusivity 

The CMI last year published a report outlining how Equality, Diversity and Inclusion (EDI) are necessary to support the growth of the UK economy and which argued that business is wasting a huge amount of talent by marginalising inclusivity. 

It found that there are 560,000 missing female managers in the UK and to equal the proportion of females in the UK population by 2026 an additional 800,000 female managers will be needed, an increase of 24% from 2021. 

CMI’s analysis also showed that the UK had 420,000 missing managers from lower socio-economic backgrounds. 

In addition, there is an almost 30 percentage point difference between the working age employment rate (81%) and the disability employment rate (57.2%). At management level, CMI’s analysis shows there are 290,000 missing disabled managers. 

In all, 41% of employees said they had witnessed colleagues being negatively affected by their background at work, while 52% of employees said they had at some point in their career been overlooked for a workplace opportunity because of their identity. 

Fostering Social Mobility 

By fostering social mobility and including talented individuals from less privileged environments, the board gains insights into different consumer segments and markets that may have been previously overlooked. This broader perspective enables the company to make informed decisions, resonating with a more diverse customer base. 

Social mobility also plays a crucial role in shaping corporate culture and employee engagement. When organisations prioritise social mobility, they signal their commitment to a meritocracy where employees feel able to succeed based on ability rather than their socio-economic status. 

Better social mobility can also strengthen stakeholder relations within organisations. 

When boards comprise individuals who have risen through the ranks, overcoming socio-economic barriers, stakeholders perceive a greater sense of fairness, transparency, and accountability. 

However, despite the recognition of the boardroom benefits, challenges exist from systemic barriers and biases. 

One significant challenge is the limited access individuals from disadvantaged backgrounds have to networks and opportunities for career advancement. Board appointments are often influenced by existing connections and informal networks, making it difficult for those from underprivileged backgrounds to gain visibility and access to boardroom positions. 

This lack of access perpetuates a cycle where boards remain predominantly composed of individuals from privileged backgrounds. 

Implicit bias and prejudice also pose challenges, rooted in stereotypes that can influence decision-making processes, resulting in qualified candidates from diverse backgrounds being overlooked or undervalued. Such biases reinforce the status quo. 

Access to quality education and professional development opportunities greatly impacts an individual’s career trajectory. However, individuals from disadvantaged backgrounds often face barriers such as limited educational resources, lack of mentorship, and limited exposure to leadership development programmes. 

Proactive measures 

To overcome these challenges, proactive measures can be taken: 

Expand networks and mentorship programmes: Organisations can create networking opportunities and mentorship programmes that connect individuals from less privileged backgrounds with influential professionals and board members. 

Transparent recruitment practices: Organisations should strive for transparent and merit-based recruitment processes to counter implicit bias and prejudice. This can involve blind screening of applications and structured interview processes that focus on skills and qualifications. 

Invest in education and skills: Efforts should be made to provide equal access to quality education and professional development opportunities, particularly for those from disadvantaged backgrounds. 

Beyond The Boardroom 

Such approaches extend beyond the boardroom. For example, David Boynton, who recently stepped down as The Body Shop CEO, says the company has focused on being purpose-led and is now, like Bridgehouse, B Corp certified. 

It has reorganised its stores, redefined its product categories and, most importantly, put people at the centre, says Boynton, which has included adopting the open hiring model pioneered by Greyston Bakery. This eliminates barriers in talent acquisition by giving an opportunity for workers that simply apply and reach the top of the waiting list. 

Body Shop first tested the approach in a distribution centre and then started applying it to the stores. 

By embracing social mobility, companies can access a more diverse pool of talent, benefit from a broader range of perspectives, and foster a corporate culture that prioritises meritocracy and inclusion. 

Improved decision-making, strengthened stakeholder relations and improved employee engagement should mean that embracing social mobility is not only a moral imperative but also a strategic advantage.