How to ACT Guidance Pillar 3: Transparency
01. Investing and valuing people
Culture is the foundation on which firms stand and the right people are an essential ingredient. Therefore, the way the firm invests in and values people is central to success of the business and a good culture. Increasingly, stakeholders want more visibility on how this is enacted. Firms should anticipate potential and existing employees, clients and other stakeholders having questions about their approach and how they ensure that policies are equitably applied and doing the intended job.
02. Transparency
Demonstrating to stakeholders how the firm is changing and how it values its people, e.g. recognition, development, support, retention efforts.
03. Question set
Describe any regular employee surveys on topics including diversity, culture, belonging and company values conducted by the Firm, including where the information is shared.
a. Are results of surveys openly shared?
b. Are action plans developed to address specific outputs?
Firm policies are available to the following groups: Public, via the website; Reports or other public data; Prospective employees during contract discussions; All employees via intranet or staff portals; Individual employees, if requested via manager or HR; All of the above
How are staff engaged in the development and deployment of policy, for example review, updating or other activity (e.g. Employee Resource Groups, surveys)?
What has been the historical turnover of staff (split between voluntary and involuntary)?
Describe the level of reporting on remuneration, gender and ethnicity pay gaps, including where to access any public reporting. Investing in and valuing people
04. What we expect to see
Transparency can start with a habit that becomes a behaviour, and when embedded, becomes a core value. Sharing information in good faith sets a tone of trust and respect with incoming and existing staff. Acknowledging that the intention is to improve and progress, and recognising that this is a group activity, will help good culture to flourish.
Firms should increasingly anticipate both potential and existing employees, as well as clients and other stakeholders, having questions about their approach to culture and inclusion. From an organisational perspective, everyone should be working with the same set of information or understanding. Otherwise, DEI is something that leaders think they are doing well, but have missed the key aspect of in creating a sense of belonging and connection to the company’s purpose. Publicly accessible policies are best practice, alongside clear internal mechanisms for updating and staff engagement.
Companies that are receptive to employees and how they can influence and change culture are those that will be able to create the greatest sense of inclusion and belonging. This means shaping culture around employees, and not expecting people to fit into a particular organisational shape. If you have a set of values that demonstrate the behaviours that are expected from staff, and an entirely separate purpose and vision, the company is effectively saying that its people are not part of creating the vision.
Connection and commitment has become increasingly important in recent years due to massive shifts in the global environment, uncertainty in economies, widespread restructuring in firms and increases in cost of living. The result has been significant challenges for businesses when recruiting (with the exception of entry-level roles where the risk of moving is reduced). People are hoping to access improved conditions and signals from firms that they are committed to embedding changes to working practice and benefits that are available. Practically they may need a higher salary than is on offer, or may challenge the salary range due to the hiring conditions within the industry.
05. Employee engagement surveys
Engagement surveys are a great opportunity to surface issues and help the firm reflect on current practices as well as gaps. Setting a schedule with objectives for feedback will help prevent survey fatigue, which can set in with too many questions or too high a frequency. Targeted questions will be the most useful for measurement, but open questions asking for qualitative information help to identify barriers and emerging issues, create change or stimulate conversation in decision-making forums. There has been a trend towards pulse surveys in recent years.
These are short surveys with a maximum of three questions that allow a quick touchpoint on a focused topic and can be done with higher frequency (eg, monthly). These are good for capturing a snapshot of sentiment or awareness (of the existence of resources, for example), however, they play a different role to more detailed annual surveys. Firms should consider where the pulse survey information is used – to provide insight to senior management or review success of an information campaign, for example.
Surveys will be most successful if they have scaffolding around them in the form of a clear explanation for the purpose, whether the survey is confidential (the reality is that unless a third-party service is collating this data, confidentiality is difficult to guarantee) and what will be done with the information. Firms should demonstrate how they will act on issues raised and where the data will feed into decision-making bodies – as is recommended for outputs from ERGs.
expected to change policy at a high frequency as it could entail unreasonable demands on business and staff, as well as confusion. However, if it is possible for groups of staff to comment on policy review it can create a sense of ownership and belonging. Combined with the findings from surveys, it can also be a way for firms to stay ahead of emerging issues.
The specific role that staff views play should be clearly stated: it is obviously not practical to act upon every recommendation put to the business, nor do employee views necessarily override the expertise within existing internal roles. However, there may be trends that employees notice and desire, including wanting to create an authentic link between external investment practice and internal values. They may be able to suggest resources and improvements that have not been visible to the business. It can be simple to create methods for collecting these suggestions, including via existing ERGs, networks or forums, but also via more formal channels.
07. Reporting and data
Reporting data that has been collected to illustrate progress or gaps in pay can be a difficult process for firms (again, notably for smaller firms). Making sure that there is a clear narrative to the reporting, that there is an action plan with measurable milestones and targets, and that there is accountability for addressing the gap is important to communicate direction of travel and the context to stakeholders. For staff turnover, if possible, firms should try to capture differences across departments and levels, as well as other salient categories, such as location and protected characteristics, to ensure there is no underlying issue to be addressed. Exit interviews can be helpful for identifying issues, but if a consistent theme from the process is that this is the first time anyone has asked the employee for their view, or they have been asked but no action was taken, it should indicate a failure in the management process before that point.
08. Further resources and ideas
Harvard Business Review, 2019. Survey: What Diversity and Inclusion Policies Do Employees Actually Want?
https://hbr.org/2019/02/survey-what-diversity-and-inclusion-policies-do-employees- actually-want
Industry examples
JP Morgan Chase, accessed July 2022.
https://www.jpmorganchase.com/about/people-culture/diversity-and-inclusion