Michael Strong, Chair at Granger Reis, leading executive search and consultancy firm within the property sector, looks at the need to improve diversity and inclusion at leadership levels by ensuring the right talent is in place across the sector.
In recent years the professional housebuilding and developing sector has been making great strides towards bringing in diversity. But it still has a way to go. Earlier this year, the Investment Association wrote to 63 groups, many of which were from within the housebuilding sector, cautioning them about their lack of female diversity at board level.
The progress appears to be far more visible at board level, however, than in executive leadership. Amongst companies in the UK’s FTSE 100 Index, women held 39% of non-executive directorships but represented just 11% of executive positions and only 7% of CEOs. Within the property sector these figures are even worse with the latest report from Commercial Real Estate Women Network (CREW) showing that women hold just 9% of c-suite positions in commercial real estate.
Whilst there have been efforts to put more diverse candidates forward for director roles – Goldman Sachs, for example, has confirmed that it will no longer take a company public if all its directors are white, straight, and male – there is still a long way to go and a growing disparity between diverse representation at board and executive level.
This is a real issue for the industry as it is leadership teams that are at the helm of hiring, promotions, and workplace cultures. It is the responsibility of boards to ensure diversity and inclusion is baked into its organisations at a leadership level:
Ensure the executive team is committed to D&I
Boards should work with executive teams to make sure they understand the importance of D&I as a vital part of creating a fair and equal workplace. This will also result in improved business performance. Harvard Business Review highlighted that by “recruiting and retaining more people from underrepresented ‘identity groups’” you are not just diversifying, but “also tapping their identity-related knowledge and experiences as resources for learning how the organization could perform its core work better”.
Pressure should be placed by boards on continuous D&I training for executive leaders to ensure leadership teams awareness and understanding of D&I issues are regularly renewed.
Create an executive team that will accelerate D&I culture and policies
Culture is set by a company’s leadership team so boards should work to identify leaders who promote inclusive behaviour and embody such behaviours themselves.
Succession planning for senior positions is important as it avoids ‘quick hires’ that might not have been thought through with diversity and inclusion in mind. However, the right talent has to be in the pipeline first to achieve this. At Granger Reis, diversity and inclusion has always been at the heart of everything we do and is an integral part of all our searches. We use our knowledge and expertise to interview the right candidates and ask the right questions to understand whether attitudes towards diversity are at the top of their personal agenda.
Psychometric testing enables us to obtain information from candidates that are more difficult to reveal during the standard interview process. Such tests can measure candidates’ suitability for a role based on personality characteristics, motivation, critical reasoning and intelligence to make sure they are not only the right person for the role but are also aligned to a company’s culture and values.
Set D&I targets for executive teams
Lastly, boards should work with leadership teams to set firm and explicit goals for D&I to track progress and hold leaders accountable for results. By creating multi-year goals, companies can stay alert to any changes allowing them to respond and adjust if they are not being met. These could be incorporated within performance assessments to ensure each person is held accountable.
Increasing diversity at board level is a great first step, but for professional housebuilders and developers to make a real and lasting change to its D&I culture, greater diversity is required at c-suite level. The role boards must play is to hold executive leadership teams accountable for inclusive workplace cultures and diverse talent pipelines.
