Posted: 24 Jul. 2018 15 min. read

The case for change – Why cultural diversity in leadership matters

Australia is significantly under-represented in the cultural diversity of its senior leaders across sectors, even when compared with the US and the UK. Action at three levels could significantly shift this: leadership, systems and culture.

A 2018 study by the Australian Human Rights Commission and the University of Sydney, Leading for Change, A Blueprint For Cultural Diversity and Inclusive Leadership Revisited’ reinforces that around 95% of senior leaders are from Anglo-Celtic or European backgrounds. This means that although 24% of the Australian population comes from non-European and Indigenous backgrounds, less than 5% of senior leaders represent this cohort – a significant gap.

The findings indicate that workplaces that prioritise cultural diversity foster diverse talent, discretionary effort among diverse employees, professional or social mobility, and hence employee retention. Further, the under-representation of Australia’s cultural diversity in senior leadership across sectors is deemed incongruent with ‘celebrated multiculturalism’ and impedes the ability to capitalise on a ‘cultural diversity dividend’.

Business case for change

The business case for change is strong: Supporting Australia’s prosperity in relation to innovation and productivity as well as “international trade, capital inflows and mobility of people” given “six of Australia’s top ten two-way trading partners are outside Europe and North America”.

Indeed, prior global research has shown that “the most ethnically diverse executive teams (in both absolute representation and also in ethnic mix) are 33% more likely to outperform their peers on profitability” and conversely, organisations in the lowest quartile of ethnic diversity in their executive teams are around 30% more likely to underperform.

Global comparisons

The study uses a process of classification and methodology consistent with global academic and industry studies and data. The findings are contextualised in Australia’s historical waves of immigration and former ‘White Australia policy’. As stated, “the mere fact that someone may identify with being culturally Australian also does not insulate someone from the possibility of being judged or perceived a certain way, because of their cultural background”.

Other global studies have shown that in the UK, whilst 12.9% of the British population is ‘black and minority ethnic’, these demographics are represented in only 3.4% of senior posts across sectors. In the US, whilst 26% of graduates are non-Anglo-Celtic and non-European, only 13% are represented in senior leadership levels. They indicate higher levels of representation than Australia (5% leadership representation versus 24% of population non-Anglo-Celtic and non-European).

Practical Implications

This begs the question – what are the barriers for culturally diverse leaders and how can they be navigated or disassembled?

Enabling effective, representative and inclusive leadership is the first key change lever*. Overt and public commitment requires authentic leadership, clear signals to employees, and reinforcement by senior executives and their line managers. Focusing on the culturally diverse leadership talent pipeline is an additional aspect of this.

The second change lever is described as ‘systems’ – enabling an ability to baseline and measure cultural diversity – which is distinctly different from ‘cultural identity’ (e.g. being Australian). Data capture, quotas and targets are explored as means to ensure accountability, compared with notions of meritocracy which may be predicated on privilege or unconscious bias.

The third change lever is (organisational) culture change – or, changing ‘the way things are done around here’. Culture change is linked to “ideas about what leadership looks and sounds like”. Often, the organisational barriers comprise “the unofficial or unspoken roles within an organisation or industry, which may only be transmitted from mentor to protégé, or from sponsor to charge”.

Leading for Change also provides a range of case studies from education, media, professional services, financial services, legal and government organisations to showcase and explicate how some of these change levers have been enacted. These ‘success factors’ in driving change include:

  • Identify and grow inclusive leadership behaviours
  • Training on unconscious bias and cultural competence
  • Capturing data on cultural diversity
  • Broadening talent pool definitions
  • Examining recruitment and succession planning frameworks
  • Identifying barriers to career progressionExamining ‘communications content’ for cultural inclusion
  • Providing targeted networking, professional development and sponsorship programs
  • Looking at organisational culture change that may be required.

The implications for business leaders are clear – using the key levers identified through this research, they can enable the cultural diversity dividend, create a prosperous and inclusive future for Australia, and ensure senior leadership is more representative of the population.

The full research paper can be viewed here.


* Deloitte research validates this. Leaders can drive up to 70% of difference between employee’s experience of inclusion – and inclusion can drive team performance by 17%, improve decision making by 20%, collaboration by 29% and enhance innovation by 20%.

This blog was originally authored by Viisti Dickens.

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