Why diversity and inclusion matters to your accountancy firm: Lessons from the Labour Cabinet

Prime Minister Keir Starmer's appointment of a new Cabinet for the Labour Government shows gender diversity and recognition of diverse backgrounds. The selections set a good example in fulfilling public sector equality duty but more than that they offer valuable lessons that are applicable beyond the realm of politics, extending into professional areas such as accounting.

Applying these lessons in your firm and encouraging an organisational culture that values a diverse workforce, including diversity in leadership roles, can bring many business benefits.

If you are an accountant in practice or industry and would like more information about becoming a 20:20 Innovation member, why not book a free 30-minute demo with our team today.

A historical cabinet shows gender diversity and an inclusive culture

The new Labour Cabinet has made history with its significant representation of women, 46% (previously 22% was the highest under the reign of Tony Blair). This includes appointments to key positions such as Rachel Reeves as the first female Chancellor of the Exchequer and Angela Rayner as Deputy Prime Minister.

Other female cabinet members include:

• Yvette Cooper – Home Secretary
• Shabana Mamood – Justice Secretary
• Bridget Phillipson – Education Secretary
• Liz Kendall – Work and pensions Secretary
• Louise Haigh – Transport Secretary
• Lisa Nandy – Culture Secretary
• Jo Stevens – Secretary of state for Wales
• Lucy Powell – Leader of the commons
• Baroness Smith of Basildon – Leader of the lords
• Anneliese Dodds – Foreign Office Minister and Women & Equalities Minister

This milestone in gender parity not only supports equality but also promotes a broader range of perspectives within the highest levels of government​, something that will come as a big relief to many.

There seems to have been a particular focus to ensure that the Cabinet represents the society it works on behalf of. If we collect diversity data on the new appointees and measure socio economic background alongside other factors like gender and ethnicity we can appreciate the inclusive environment that the new Cabinet appointments create.

For instance, it has come to light that the life experience of some allow them to represent minority groups who have not previously had a presence.

Angela Rayner, for example, is the first ever Secretary of State for Housing who has lived in social housing and was a teenage mother who grew up raised by her grandmother.

What is the business case for promoting diversity and inclusion?

Enhanced Decision-Making

Drawing on insights from the Harvard Business Review, promoting inclusivity means bringing cognitive diversity to an organisation in the shape of varied experiences and viewpoints. These lead to more robust and innovative solutions.

For accountants, this translates into better financial strategies and risk management, by tackling problems and opportunities form different viewpoints.

The general direction of Reeves' economic policy should help many women in low-paid and part-time roles (it cannot be forgotten that the last time Labour was in Government, the introduction of minimum wage benefited more women than men).

Just as a government gets closer to having a balanced ratio to that of the population, accounting firms benefit from reflecting the diversity of their clientele.

This alignment enhances understanding and service delivery, potentially increasing client satisfaction and retention.

It's always a good idea to match your team with clients who match their ethics, beliefs, and experiences to help build a strong level of empathy.

Fostering Equality

By advancing women and other underrepresented groups into leadership roles, organisations challenge existing biases and pave the way for equitable workplaces.

Beyond complying with employment law or expected social norms, each protected characteristic, such as gender, age, and race, ensures that the leadership is then truly representative of the customer base the business serves and will help when it comes to attracting new business.

This is especially pertinent in accounting and law firms, where diversity has been historically lacking but has seen the dial changing in recent years.

Improved Performance

There is tangible evidence that organisations with diverse leadership perform better. For accounting firms, this could mean enhanced client relationships, innovative problem-solving, a competitive advantage over other firms and an overall better financial performance.

How do we match up at 20:20?

Well aside from our technical director being female, 66% of the workforce identify as female. Furthermore, 40% of our webinar programme is delivered by females.

At 20:20, it's not just gender, we are also proud to promote diversity in age, race, sexual orientation, religion and more.

What can accountants learn from the new cabinet?

1. Champion Diversity in Your Firm: You may first need to do some data collection to determine how diverse your firm currently is. Then, use a strategic approach to hiring that prioritises diversity, ensuring that all groups have equal opportunities for advancement. Don’t forget to acknowledge special occasions and celebrate events that are important to minorities in your firm. Diversity training can help all in the firm to embrace this important cultural shift.
2. Implement Inclusive Policies: Develop workplace policies that support a balance between work and personal life, such as flexible working hours and comprehensive parental leave, to attract and retain diverse talent.
3. Mentorship and Training: Set up mentorship programs that aid career growth for minorities who may not usually have access to it. Provide training to all employees on unconscious bias.
4. Client Engagement: Recognise that diverse teams are better equipped to understand and meet the needs of a varied client base. Promote your firm’s commitment to diversity as a core strength in your client interactions and ensure your clients are aware of it.

The Labour Government's approach to forming a Cabinet that closely reflects society's diversity serves as a potent reminder of the importance of such values in any professional setting, including accounting especially as we take on clients and team members from all walks of life.

If you are an accountant in practice or industry and would like more information about becoming a 20:20 Innovation member, why not book a free 30-minute demo with our team today.