Business told to diversify, for its own sake

The last few weeks have seen a concentration of stories relating to women in business hitting the headlines. Apparently, female-managed hedge funds lost less money than male-managed ones, Harriet Harman will shake things up in the City and get more women on boards, and we can invest in a fund that specialises in gender-diverse companies.

It all makes for interesting reading, with plenty of data pointing to the benefits of having more women in senior roles. But it can be dangerous to take everything at face value. Looking at an individual CEO or manager’s performance is tricky. They may have been lucky, seeing their company derive record profits due to factors outside of their control. Also, how long is long enough to judge success? Is one year in a job enough? How about five? Do we reanalyse this success if the company’s fortunes plunge next year? I’m a little reluctant to attribute the success of a large company or a hedge fund to those at the top, male or female, without a more thorough look at how they did so well.

It might be wiser to look at this as a (forgive me) ‘big picture’ issue. Encouraging diversity (and not just gender diversity) at all levels of a business is a sign that a company values the different perspectives that come from employees of different backgrounds. This is a part of a good risk management strategy, as varied insight can lead to better identification of risk and opportunity.

The headlines around this issue are great for provoking thought, but run the risk of oversimplifying things. The important thing is, we are seeing some evidence that diversity is good for business, and this should not be ignored.