DEI beyond window-dressing. Reckitt’s approach to moving the needle

• 50% of managers across global operations are female
• Use of Employee Resource Groups to drive inclusivity

Diversity, Equity, and Inclusion (DEI) have become increasingly prominent in today's corporate landscape, capturing the attention of organizations worldwide. 

Acknowledging the pressing need for greater diversity and inclusion, many companies are eager to embark on this transformative journey. However, amid the surge of interest, a significant challenge emerges: a considerable number of businesses find themselves uncertain about where to begin. Navigating the complex terrain of DEI requires a strategic approach that goes beyond mere lip service, demanding a commitment to fostering lasting change within organisational cultures. In this evolving landscape, companies must grapple with the complexities of DEI, striving to create workplaces where all individuals are valued, respected, and empowered.

For Malaysian corporations, DEI would largely fall under the Malaysian Code on Corporate Governance, last updated in 2021 by the Securities Commission (SC) with much of the focus lately on female representation on the boards of public listed companies. The SC also released the Corporate Governance Monitor, and the 2022 edition observed that while adoption levels of the code remained positive, the use of generic statements in disclosures was still common.

The MCCG is based on three key principles of good corporate governance, which are, board leadership and effectiveness; effective audit and risk management; and integrity in corporate reporting and meaningful relationships with stakeholders. 

Sustainability Matters has previously covered board diversity in this interview with the Chair of the 30% Club Malaysia. 

DEI however requires a broader strategy and encompasses the organisational culture and issues of diversity and equity beyond gender. An Asia Pacific workforce survey by PwC found that 30% of employees were likely to change jobs in the next 12 months, and only 30% of employees felt that their managers tolerate failures and debates – which suggests a lack of intellectual diversity. These should be cause for concern for HR professionals.

Reckitt, a consumer goods corporation with close to 40,000 employees globally has been working to address these challenges. Sustainability Matters spoke with Francis Hoefman (FH), Global Senior Vice President, Human Resources; and Ankur Chaudhary (AC) (pic), General Manager, of Malaysia, Singapore and Vietnam.

SM: The focus on diversity overall seems to be on the issue of gender. No doubt this is important and corporations that are embracing this tend to show a year-on-year increase in female representation in leadership positions. In Reckitt's case, there is parity with 50% of managers being female, but interestingly, the percentage of women on the board fell from 42% in 2021 to 33% in 2022. What explains this drop?

FH: That’s an interesting observation. If you look at our commitment to inclusivity, indeed, 50% of our managers are now female. At the same time, many other corporations are now trying to address gender representation on their respective boards, and due to the lack of female talent at that level, there tends to be lateral movement across organisations. It is not so much that they are losing opportunities but gaining more opportunities in the economy and driving competition for their talent.

AC: I’d also add that 50% of our leadership in Malaysia is female. Our employees also have access to resources for any support that they need, and we do this through specific employee resource groups or ERGs.

SM: Still on the topic of female representation – the common refrain is the cost of replacing female employees who opt for a career break due to family commitments. Reckitt provides 26 weeks of paid maternity leave and the option for another 26 weeks of unpaid leave with job protection. That’s potentially a full year of leave for the employee. This must create some challenges for HR.

FH: The answer is to plan accordingly. Ironically, it's easier for HR to plan over a longer period than situations when a worker suddenly becomes unavailable. It may seem counterintuitive, but bringing in someone as a replacement for a very short period is also a problem. They do not get to learn or contribute as much to this new role. The best way to view this is that it also allows us to build our talent pool internally. And anyone coming back after an extended maternity leave will be given a job with similar status and pay as when they left.

SM: Equity tends to get overlooked somewhat, but we hear stories that suggest younger cohorts are increasingly struggling to get a leg up economically. When we take a long look at history, the only way for the masses to achieve equity has been to stay in a job long enough that allows them to, firstly, build experience, and secondly, move up the corporate ladder. But gig work and freelancing challenge this notion. Even in your case, interestingly, it is those below 30 years old who show the highest turnover rate. I’m sure this trend is not exclusive to Reckitt, but this has to be a concern.

FH: This is a challenge for any corporation – attracting talents and then retaining them. Part of attracting young talent is going into universities which provides us access to a larger talent pool. Interestingly, 55% of our STEM-related positions are made up of women. And we quite literally address equity through our employee share plan. Our employees have the option to save towards purchasing our shares at a 20% discount, and the saving is risk-free. Almost half of our employees globally take this offer, and as of the last quarter of 2022, made a gain of around 23%.

AC: I'll also add that before this I was involved with startups back in India. It's typical for a young founder like me to think that we would just work at a startup and reap the benefits once we exit. But even after an exit here I am working for a global conglomerate. The culture is very much like a startup but I can work on a much larger scale and have a sense of security.

SM: The sense I get when I speak to other corporations is the lack of direction when it comes to implementing their DEI initiatives. You mentioned the ERG concept before. What is it and what does it achieve?

FH: The employee resource group is simply a network among employees around specific dimensions. We have four such ERGs at the moment, namely Women@Reckitt, LGBTQ+@Reckitt, Race&Ethnicity@Reckitt, and Disability@Reckitt. This allows employees to connect and support each other and provide feedback to us that can then inform our decisions. 

AC: The ERGs allow our employees to feel like they are more than just workers. It is a way for everyone to collectively address wellbeing and foster support amongst the team.