Unlocking Success through Diversity, Equity, and Inclusion in Asia Pacific

In this month's ESG Buzz, we explore how DEI drives corporate performance and highlight necessary steps to achieve success in this area. 

Diversity, Equity, and Inclusion (DEI) initiatives are showing some progress in the Asia-Pacific region, but they still have a considerable way to go. At SS&C Intralinks, we recognise that DEI is no longer just a buzz term for corporate reporting. Instead, these initiatives are critical in driving long-term success across every industry.

The Power of Diversity in Corporate Performance

Diversity encompasses a wide range of dimensions beyond gender and ethnicity, such as age, sexual orientation, disability, and more. Embracing diversity across these dimensions brings fresh perspectives, enhances creativity, and fosters innovation.

It should also be noted that diversity drives marked improvements across every corporate reporting metric. The Gender Diversity & Dealmaking 2022 report by SS&C Intralinks revealed that:

• Female CEOs complete more M&A deals
• Diverse boards and female CEOs lead to better post-deal performance
• Acquisitions by diverse boards exhibit greater risk aversion and better performance

Additionally, McKinsey research has found that companies with high levels of executive- level diversity were 62% more likely to outperform their competitors in profitability. Another study found that when women match men’s participation in the workforce, significantly more opportunities arise that could improve Asia-Pacific’s GDP by 12.5% - the equivalent of USD $4.5 trillion.

The Current State of DEI in APAC

Kantar analysis reveals that DEI initiatives are struggling in APAC, despite growing awareness of their importance among businesses and brands. The annual global study revealed DEI initiatives were struggling in APAC markets. Although Australia showed the second-largest growth in DEI progress, Japan has gone backwards, and India underperformed, showing we still have a long way to go.

Another study by Workday found that the lack of a strategic approach in DEI was most prevalent in APAC, with more than half (52%) of respondents indicating that their organisations did not have an approach - which is concerning when compared to Europe (39%) and North America (34%).

From a reporting perspective, we see that DEI disclosure is slowly becoming a mandatory requirement across many domains. For example, the Hong Kong Stock Exchange and Singapore Stock Exchange have recently updated board diversity disclosure requirements for listed companies.

In Singapore, the voluntary target for the 100 largest companies is for 25% of the board to be female by 2025 and 30% by 2030, while South Korea has also implemented mandatory diversity quotas in 2020, requiring at least one female on the board of public companies.

Leading the way in private markets, AirTree Ventures, Blackbird Ventures, along with other VCs in Australia, have recently pledged greater transparency in revealing investments in women-led businesses to address start-up funding gender imbalance and promote diversity for better outcomes.

Steps to Building DEI Success

Creating an inclusive environment where all employees feel valued and respected is key to unlocking the true potential of diversity. This can be achieved by encouraging open dialogue, establishing mentorship programs, and implementing unconscious bias training to foster inclusivity. Every company should, at the minimum, be pursuing the following:

Addressing Pay Equity: Strive for pay equity within your organisation by regularly conducting pay audits and eliminating any unjust wage gaps. Fair compensation enhances employee morale and bolsters the company's reputation as a socially responsible entity.

Parental Leave Policies: Promote equal parental leave opportunities and support for working parents in company policies. Encourage shared caregiving responsibilities, while fostering a family-friendly and supportive work environment.

Promoting Equal Opportunities: Ensure equal access to growth opportunities and leadership roles for all employees, irrespective of their background. Implement clear career advancement frameworks and mentorship programs to support career progression.

Embedding DEI in Company Policies: Integrate DEI principles into your organisation's governance structure and core values. Establish clear policies against discrimination, harassment, and bias, with stringent consequences for violations.

Measuring and Reporting Progress: Set measurable goals for DEI initiatives and track progress regularly. Transparently report on DEI metrics and outcomes to stakeholders, showcasing your commitment to accountability.

Embracing DEI practices leads to tangible benefits for businesses, employees, and society as a whole. By fostering a culture of inclusivity, we pave the way for innovation, increased productivity, and long-term success. So, take the leap, embrace change, and be at the forefront of the transformative power of inclusion. Let's make a positive impact and shape a brighter, more inclusive future for all.