Gina Miller: boost equality to boost returns

“If you are a woman from an ethnic minority and want to go into fund management, you are starting with two weights around your ankles,” states Gina Miller, co-founder of London-based online wealth manager SCM-Direct.

In a video call from home, the Guyanese-British business owner, whose campaigning catapulted her to national prominence, shows the passion and determination that led her to successfully take the British government to court, first to ensure parliament had a vote on the UK’s EU exit and then over Boris Johnson’s unlawful prorogation of parliament.

Ms Miller adds that this lack of diversity in fund management “must change”. There is clear need for the financial services industry, which has nurtured “a very macho, old boys’ type culture”, to address the “trust deficit” which makes it difficult to attract both consumers and talented people from different backgrounds.

While her political activism resulted in public abuse and death threats, her campaigns for greater transparency within the financial services industry — conducted with her husband and business partner Alan Miller, a former hedge fund manager — has attracted strong animosity from parts of the City.

Promoting equality

A long-standing fighter for equality and inclusion, Ms Miller has no intention of accepting the situation, which is particularly grim in the financial services industry.

Research shows that the most diverse companies, both by gender and race, substantially outperform the least diverse ones, as they are better able to win top talent, improve their customer orientation and employee satisfaction, and their decision making is more robust. This creates a virtuous cycle of increasing returns. Yet, there is a widespread underappreciation of commercial gains, believes Ms Miller. Pockets of resistance are based on the misconception that embracing equality somehow decreases individuals’ ability to progress, inhibiting growth and competitiveness in organisations.

However, for change to happen, the language we use must change first. “The way we talk about diversity is very gender focused and creates a barrier, as if talking about women progressing must mean that men are regressing,” believes Ms Miller. Talking about equality, rather than diversity is much fairer. “We need to get rid of that combative language. We have to talk about fairness of opportunities for everyone.”   

Women must also be mindful that they “do not own” the diversity space, otherwise other groups are going to be discriminated against.

Racial diversity is “shockingly” low. The number of black senior board executives in FTSE 100 companies has now fallen to zero, according to recruitment and diversity consultancy Green Park. Over the past six years, there has been no progress overall in the ethnic minority representation in the top three positions in the UK’s largest firms, which is stuck at three per cent. According to a government-backed review of corporate diversity, almost a fifth of FTSE 100 boards lack any ethnic minority representation, despite ethnic minorities representing 14 per cent of the UK population.

On average, the FTSE 100, FTSE 250 and FTSE 350 have all achieved the target of women holding 33 per cent of board positions by the end of 2020, according to the Hampton–Alexander review’s final report. But this change is not sufficient, if these are predominantly white women from the same social and educational background, explains Ms Miller. Moreover, women still only hold 14 per cent of executive directorships in the FTSE 100 and less than 30 per cent of senior leadership positions.

Creating real change

It is crucial that the sector embraces diversity in all its characteristics. “There is too much bullying of people coming from a different sexual orientation in businesses and in the financial sector,” Ms Miller states. “And in the City, we have too much lack of understanding of mental health issues, or people with disabilities.”

The focus is all on external diversity, but that is not all that matters. One of the mistakes boards make is recruiting diverse people into the organisation and then expecting them to conform. “Valuing diversity isn’t enough. Rhetoric needs to translate to real changes and creating workplaces where everyone feels welcome. Recruiting diverse staff, but then expecting them to conform to an organisation’s culture and ‘fit in’ does not create change.”

Individuals’ diverse characteristics must be protected by putting in place infrastructure, processes and procedures — this is crucial to shield the talent pool building in middle ranks, where most leave. While there has been diversity progress at board and entry level, more women and people from ethnic minorities leave middle management roles in financial services than any other sector.

“Be it the culture, the way they are treated or micro aggression, some work has to be done as to why that is happening,” ponders Ms Miller.

Leadership must have a very active, strategic role and must engage at all levels of the business. “The culture — what is allowed and what is acceptable in business — comes from the top, because if leaders are not leading the way, then others will decide their own path.”

Linking executives’ pay to diversity targets is an effective strategy in ensuring that business leaders are held accountable on equality data. “I do think that money talks, and their bonuses should have an element built into it which reflects cultural elements of the business.”

Companies should provide continual assessment and training on unconscious biases and gaslighting. This is a very serious, but “little talked about” psychological approach, where people manipulate and make others feel inferior to themselves, belittling them.

Quotas and tokenism are dangerous

The analysis of diversity data is key to monitoring progress. Today, in the City, women represent only 17 per cent of individuals approved by the Financial Conduct Authority. In the UK, female fund managers run just less than 8 per cent of total UK funds, according to Morningstar. Similar stats are found in other European countries, such as Italy and France. Women fund managers account for just 11 per cent of the profession globally, up from 10.3 per cent since 2016, according to Citywire. At current rates of progress, it will take another 200 years for female fund managers to reach equal representation.

That there are not enough women in the pipeline is just an “excuse”, believes Ms Miller. “The pool is overflowing with talented and experienced women. It is up to the companies to go and find them and reassure they would be welcome.”

Women need role models and need to be able to see women “who look like themselves and are succeeding, put the hand out to them and help them up the ladder”. She suggests companies should put more women up for media — this is important not only to improve public perception, but also for attracting diverse talent into an organisation.

She strongly condemns tokenism, where ‘tokens’ are “trotted out” every time they are needed for an article on diversity. Since the recent Black Lives Matter protests, several big companies changed the imagery in their brochures and websites almost overnight, adding a veneer of diversity without implementing any fundamental change underneath. “You may put a lick of paint on an old car, but it is still an old banger — it’s what is underneath [the surface] that matters. I think it is quite an insult, what so many firms have done.”

A strong believer in blind CVs, which omit any personal details that refer to the applicant’s gender, age or ethnicity, Ms Miller thinks universities should be classified in tiers, to rebalance the strong bias that favours Oxford, Cambridge or Durham graduates in the UK. “If you look at the boards in the City, it is quite extraordinary how few people have come from other universities or parts of the country.”

Yet, Ms Miller is not a fan of diversity quotas. She is “sympathetic” to the argument, but experience in other countries shows no evidence that this system has made a significant difference in the long term. “Quotas have actually created more angst and anxiety within organisations.” Women themselves feel diminished by the approach, making them question the real reason behind their success.

Looking ahead

For all its devastating effects on people and the economy, the Covid-19 pandemic has strongly bolstered the concept of responsible capitalism, where companies’ success and leadership goals are not only judged on profits, but also on how they affect people and planet, with climate risk being one of the biggest challenges.

Firms’ ethics are more strongly scrutinised. “Brand and how brand equity works in the mind of the consumer is going to be a massive issue going forward,” adds Ms Miller. “For us as industry, we have a long way to go. We do have a trust issue, we do have far too many scandals, we do have too many companies who fly by the seats of their pants and think about fines, or being caught, as the cost of doing business.”

Companies who have got their heads “buried in the sand” and do not see the generational shift after this pandemic are going to suffer. There is a corporate risk of not only failing to embracing equality and diversity, but also for failing to side with consumers’ collective conscience.

The pandemic has been a shock to the world and shock waves from it have touched every single part of our lives. But it has also highlighted long-standing issues across society, business and politics, quickening the pace of those conversations in unimaginable ways, Ms Miller adds. “I think the pandemic will be transformational in many more positive than negative ways.”