Overview of EU diversity and inclusion policies tailor-made for multinational companies interested in designing or developing diversity and inclusion strategy for their employees

1. Diversity and Inclusion Policies:
A European Perspective
DR ALICE SZCZEPANIKOVA
UNIVERSITÉ LIBRE DE BRUXELLES
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2. Overview
- Business case for diversity: latest data and critical observations
- European Union legislation on diversity and inclusion
- Reality on the ground – conclusions from EC-commissioned studies
- Ongoing legislative developments
◦ non-financial reporting
◦ mandatory boardroom diversity
- EU support of diversity initiatives
◦ EU Funding: Rights, Equality and Citizenship programme (2014-2020)
◦ Diversity Charters
- Best company-level practices: examples from the food industry and beyond
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3. Business case for diversity: latest data I
- the latest data clearly show there is a causal relationship between levels of diversity
and inclusion and business performance
CTI (2013): 40 case studies, 1,800 employee surveys, “two-dimensional diversity”:
“inherent diversity” (gender, ethnicity) & “acquired diversity” (experiences, language
skills, cultural fluency), publicly traded companies with two-dimensional diversity were:
- 45% more likely to have expanded market share in the past year
- 70% more likely to have captured a new market
- employees 75% more likely to have a marketable idea implemented
Teams with 1+ members representing their target end-user  158% more likely to
understand that target end-user and innovate accordingly
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4. Business case for diversity: latest data II
American Sociological Association study (2009): 1% rise in the rate of gender diversity
and ethnic diversity in a workforce  3% and 9% rise in sales revenue
Internal organizational factors:
- team homogeneity stifles innovation (CTI, 2013)
- gay people 10% less productive when they stay in the closet, not able to be
themselves (Frost, 2014)
Broader (labour) market context:
- LGBT community spending power: £81bn (UK), $712bn (US); 78% would switch brands
to companies known to be LGBT-friendly (Witeck & Harris Interactive, 2009)
- Europe with the current employment rate for women  shortfall of 24m people in the
active workforce by 2040 (rate equal to that of men shortfall drops to 3m) (McKinsey,
2012)
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5. Critical observations
- organisations without proper managerial or cultural understanding of diversity: risk of
heightened conflict and reduced productivity
- benefits come only with active management of diversity: “It is not enough to create a
corporate version of Noah’s Ark bringing in ‘two of each kind’” (Deloitte, 2011).
- words instead of action: 80% CEOs from 60 participating companies made gender
diversity a priority BUT only about half of employees from the same companies agreed
that the CEO is committed to it (McKinsey, 2012)
- many diversity initiatives fail because they are merely projects and do not address the
system as a whole (Frost, 2014), short-term diversity agendas, hitting percentage
targets, lack of real commitment for change
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6. European Union legislation on diversity and inclusion
Treaty of Amsterdam (in force 1999): new legal competencies to strengthen the battle
against discrimination in all its forms: based on nationality, gender, racial or ethnic
origin, religion or belief, disability, age or sexual orientation
Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal
treatment between persons irrespective of racial or ethnic origin (Racial Equality
Directive)
Council Directive 2000/78/EC of 27 November 2000 establishing a general framework
for equal treatment in employment and occupation (Employment Equality Directive)
A number of gender-equality-related directives
2010: the EU ratified the UN Convention on the Rights of Persons with Disabilities
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7. Racial Equality Directive
- lays down minimum requirements for implementing the principle of equal treatment
between persons in the EU
- forbids direct and indirect discrimination based on race or ethnic origin, as well as
harassment
- burden of proof: the party accused
- encourages dialogue with social partners and civil society
- Member States must establish at least one body dedicated to combating
discrimination, responsible for helping victims and conducting independent studies
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8. Employment Equality Directive
- a general framework to ensure equal treatment of individuals in the EU, regardless of
their religion or belief, disability, age or sexual orientation
- access to employment or occupation and membership of certain organisations
- same features as the Racial Equality Directive
- allows for positive discrimination
- protection of victims of discrimination against reprisals, notably dismissal
- monitoring of workplace practices, codes of conduct, exchange of experiences and
good practices, impact assessment
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9. EC-commissioned studies: the reality on the ground
2003: Methods and Indicators to Measure the Cost-Effectiveness of Diversity Policies
in Enterprises
- difficulties in changing business culture
- lack of awareness of workforce diversity policies
2005: The Business Case for Diversity: Good Practices in the Workplace
- unequal engagement: countries of Southern Europe and the new Member States
lagging behind
- most corporate diversity initiatives still focused mainly on gender equality issues
2008: Continuing the Diversity Journey: Business Practices, Perspectives and Benefits
- importance of intermediary organisations (business schools) and voluntary diversity
initiatives (diversity charters)
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10. Europe 2020 strategy
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= the EU's growth strategy
- within a yearly cycle of economic policy coordination (European Semester) the EU
monitors employers’ initiatives to:
- bring closer to the labour market the unemployed from disadvantaged groups
(persons with disabilities, the long-term unemployed and workers with a migrant
background)
- address the situation of young people on the labour market
- boost female employment rates and to reconcile work and private life: introducing
changes to early childhood education, care services and revising parental leave
regulations
- address barriers to longer working lives

11. Ongoing legislative developments: non-financial reporting
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Directive on disclosure of non-financial and diversity information by large companies
and groups
- adopted by the European Parliament on 15 April 2014 (needs to be adopted by the
Council)
- concerns companies with more than 500 employees
- information on policies, risks and outcomes as regards environmental matters, social
and employee-related aspects, respect for human rights, anti-corruption and bribery
issues, and diversity in board of directors
- companies which do not have a diversity policy will have to explain why not

12. Ongoing legislative developments: mandatory boardroom
diversity
- directive adopted by the European Parliament in 2013 (some Member States in the
Council are blocking progress)
- to increase the presence of the under-represented sex on non-executive corporate
boards throughout the EU by setting a minimum objective of 40% by 2020
- 11 EU Member States + Norway have already introduced legal instruments to promote
gender equality on company boards  (France, Norway, Italy – significant increase in
female board members)
- 2/3 of the Member States - no legal measures introduced, no significant progress in
recent years
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14. EU support of diversity initiatives: Rights, Equality and
Citizenship programme (2014-2020)
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- EU funding to promote the effective implementation of the principle of non-discrimination
on grounds of sex, racial or ethnic origin, religion or belief, disability, age
or sexual orientation
- open to various private and public actors
- profit-oriented entities: access to the Programme only in conjunction with non-profit
or public organisations
- types of action include: studies, data collection, reports and educational material,
workshops, experts' meetings and conferences, training, mutual learning, cooperation,
awareness-raising, exchanges of good practices, innovative approaches and
experiences, information campaigns

15. Diversity Charters
- valuable starting points for companies wishing to develop their diversity policies
- provide a framework for companies to develop existing policies
- recognised public “trademark” that symbolises commitment to diversity issues
- open to any private company, membership requires no formal inspection or
assessment: commitment to create a working environment free of any prejudice and to
combat all forms of discrimination
- careful line to be drawn between creating a Diversity Charter open to all companies
and ensuring that real actions on diversity stem from it
- EU-level Charter: helping to establish links between national-level diversity initiatives
and raising standards across Europe
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16. EU support of Diversity Charters
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- Diversity Exchange Platform: access to best practices information, training tools and
exchange with other companies all over Europe
- organising High Level Events: regular meetings with the Diversity Charters: produce
documents on diversity management, raise awareness among policy makers and
connect them to business representatives
- 12 National Diversity Charters joined the EU Platform since 2010: Austria, Brussels
Capital Region, France, Germany, Italy, Spain, Sweden, Poland, Finland, Luxembourg,
Ireland and Estonia
- current objective: to find a body that would be in charge of facilitating the diversity
charter exchange, create European awards in diversity and set up a database of good
practices

17. Other voluntary initiatives encouraging companies to adopt or
further develop diversity policies
- competitions for “Best Practice” awards issued by external bodies
- systems of ranking and benchmarking that measure success in developing and
implementing diversity policies
- collaborations between private companies and public sector contractors that
encourage business between organisations with a proven record of accomplishment of
diversity
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18. Best company-level practices: Danone
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- declared philosophy: diversity as an opportunity, a source of performance and team
dynamics rather than a regulatory requirement
- mixed diversity priorities: promote gender equality, mixing of generations,
representation of cultures and nationalities, improve variety in career paths and
qualifications
- cooperation with International Union of Food workers: gender equality agreement
(1989), agreement on diversity in general (2007): places diversity and the ensuing
commitments at the heart of human resources
- collecting and sharing diversity data in the form of infographics

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20. Best company-level practices: Danone and female managers
- high percentage of women at the managerial level (almost 50%)
- inspired by studies on better performance, more innovation and creativity in
companies with more women on boards and executive committees
- data collection: anonymous survey about leadership styles within Danone  positive
feedback on female managers’ leadership style; survey on perceived access to senior
positions  significant gender difference discovered; introduction of exit interviews
when women leave the organization
- combination of mentoring, training and networking: women's leadership courses,
creation of female networks at headquarters, mentoring programmes
- potential danger: pitting one group against the other, need for subtlety (keeping male
colleagues and managers advised of the discussions in the networks)
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21. Best company-level practices: Lloyds Banking Group (UK)
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- normalizing disability in the workplace
- creating flexible, inclusive work environment for workers with different kinds of
disabilities
- workplace adjustment policies: dealt with 19,000 cases of disabilities
- employees come forward for consideration (no compulsory diagnosis)
- 2013 survey of 2,000 employees: 85% of participants reported improvement in
performance (77% said the improvement was dramatic); 62% reported reduced
sickness absence and line managers reported an 80% improvement in performance
- collaboration with specialist temporary recruitment business to recruit disabled
people

22. Best company-level practices: TNT (Netherlands)
- mail, express an logistics services
- focus on ethnicity and reflecting diversity of its customer base and Dutch society
- programme to recruit and train newly arrived immigrants
- language courses and on-the-job training, each recruit receives guidance from
mentors
- in 2005: 200 immigrants in 15 cities have joined the company through the programme
- recruits demonstrate strong motivation and satisfaction, retention rates are high
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23. Best company-level practices: Shell (Netherlands, UK)
- LGBT employee networks
- receive support from the company: financial support, senior executives offer guidance
and counsel
Results:
- raising awareness of inequities; taking part in events such as the 2004 European
diversity and inclusiveness conference
- helping to create a fairer human resources system: ensure same-sex partner benefits,
not posting LGBT employees to LGBT-hostile countries; helping to recruit and retain
people
- helping to improve company’s image
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24. That is how it used to be
Board meeting at the former Fisons pharmaceuticals and fertiliser company, 1960. Source: FT, May 15, 2014
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