In 2014, KPMG was the first of the Big Four firms to unveil a detailed diversity profile of its 11,500-strong workforce and acknowledge that its class, gender, ethnic and sexual orientation did not reflect the make-up of wider British society or its client base. To address this, the firm announced targets for the following three years to benchmark itself and develop the workforce.
“Our chairman feels that the more transparent we are about diversity targets, the more likely we are to hit them,” explains vice chairman Melanie Richards, as we chat over coffee in the firm’s Grosvenor Street offices. “I am extremely proud that we made that move.”
As a successful female in business, 51 year-old Richards aims to inspire other women – inside and outside the organisation – in their working lives. “You want to see change not only in your company but in society,” she says. “People like me and organisations like ours have a responsibility to play a role in the agenda.”
Richards cut her teeth in banking, joining NatWest from school in 1982. Bypassing university was a conscious choice. “I had a fierce sense of wanting to be financially independent and it’s a decision I’ve never regretted,” she says.
Her 15-year stint at NatWest was characterised by opportunities to try new things and take risks – a recurrent theme during my time with her. After a spell with Hambros Bank, Richards was head-hunted to join KPMG in 2000. Since then, she has advised a range of listed and private companies on substantial fund-raisings and restructurings from tens of millions of pounds to several billion. She joined the KPMG board three years ago as a non-executive partner, becoming vice chairman in 2014.
The 30% club
A founding member of the 30% Club, Richards recalls how, in 2009, she was approached by Helena Morrissey, CEO of Newton Investment (and mother of nine), to attend an event on gender diversity at senior levels. At that time, just 10-15% of senior roles in the UK were being filled by women. “We got together as a group of women to think about how we could promote gender diversity. We decided getting men involved would be a good idea,” reveals Richards.
In November 2010, with seven founding chairmen supporters, including KPMG’s own chairman, the 30% Club was officially launched in the UK, with the aim of achieving a minimum of 30% women on FTSE 100 boards. Just three months later, on 24 February, the Lord Davies Women on Boards review set out 10 recommendations forming a blueprint for voluntary, business-led change.
“[The 30% club] started as an opportunity to haul up the banner on female board representation,” explains Richards. “It was a welcome coincidence that it coincided with the Davies review – it’s been a helpful partnership. The original goal was to get more women in the boardroom and raise the profile of gender issues.”
Today, there are more women on FTSE 350 boards than ever before in the UK – 26.1% at FTSE 100 companies and 19.6% at FTSE 250 firms. There are no all-male boards in the FTSE 100 (compared with 21 in 2011) and just 15 in the FTSE 250, versus 131 in 2011.
A voluntary approach to diversity
Yet Richards points out that most of the success is in non-executive appointments. “I’m disappointed wehaven’t seen more progress on the executive pipeline,” she admits. She is, however, pleased that progress has been made through a voluntary approach (albeit in the shadow of the threat of government imposed targets). “We’ve seen the adoption of quotas in various European countries, but in the UK it wasclear that a voluntary, business-led approach would be more likely to win the support of key stakeholders and increase our chances of driving long-term cultural change in the boardroom and beyond.”
Tellingly, in Norway, the percentage of women on corporate boards is approximately 40% as a result of quotas that were introduced in 2003, but women account for a disappointing 2% of CEOs and just 10% of executive committee members.
“It’s not just about having targets, it’s about what’s happening in the pipeline to nurture people,” continues Richards. But she believes the threat of quotas has played a part in achieving targets. “The business case hasn’t been won in all quarters but there’s much more awareness now. Societal pressure and targets are much more powerful than an imposed quota.”
So what does this mean in a KPMG context? “The world is changing so quickly, we have to respond to the ever-changing needs of our clients,” she replies – adding that there is recognition within the firm of its role in rebuilding trust in business, not just in its capacity as an auditor and adviser but as a large employer too. “We have a responsibility to consider what we are doing in a societal context; inclusion is just one aspect.”
At organisation-level, having set an ambitious target of having 25% female partners in three years, KPMG’s 2015 report revealed partner representation actually dropped in the first year from 15% to 14% in 2014-15.
As it happens, Richards is sanguine about that result – she says sometimes you have to go backwards to move forwards, and remains confident that targets have created a different focus around attrition, recruitment and promotion. “What’s making a difference is a greater emphasis on identifying female talent and managing them in a more focused way,” she says.
KPMG is addressing female participation across the whole employee life cycle, from increasing the female intake at graduate level to ensuring women are given the support to progress. Female promotes-to-partnership increased in 2015, and female representation at both director and senior manager level increased by two percentage points – to 26% and 38% respectively.
Female progression at KPMG
Ensuring female talent is also pulled through the middle layers of management will be an area of focus for KPMG, going forward. Richards says: “About eight years ago, we conducted research and found a marked differential in the progression of women beyond manager, so we launched a female leadership programme called ‘Reach’ to address the skills and confidence of individual women within the business.”
Marrying programmes like this with open, honest conversations with leadership is crucial for Richards. “This is not about fixing the women, but fixing the system. Stereotypes say that these women leave because they have kids, but it’s more complex than that. It’s about encouraging women to articulate what they want from the organisation and their careers,
and about leaders recognising their responsibility to identify and encourage talent across all the strands of diversity.”
In 2014, KPMG published Cracking the Code, a research report produced in conjunction with business psychologists YSC and the 30% Club, which found that men were 4.5 times more likely than women to hold jobs that reported directly to the board.
“One of the key things we found was how differently women express ambition,” reveals Richards. “Yes, some of it is about the organisation pulling people through, but we also need people to push a bit harder on the door.”
"One of the key things we found
was how differently women
express ambition"
Tiara syndrome
She cites Sheryl Sandberg’s assertion, in her book Lean In, that too many women suffer from “the tiara syndrome” of keeping your head down, delivering excellent work and hoping the right people will notice. “It’s not about reprogramming women to be more like men, it’s about making women more alive to the fact that expressing a desire for promotion is a good thing,” she asserts.
For Richards, a mother of two herself, achieving work-life balance is something of a utopian theory. “I prefer the term ‘work-life fit’. Sometimes work has to take precedence, sometimes family does. Doing the perfect mother thing and being a perfect leader is a pipe dream.”
Having an intense passion for her career has helped Richards on her journey. “On the days you decide to be prioritising your job instead of being with your children, you have to have no doubt about why you’re doing it,” she advises. “You have to be doing something you’re passionate about. The more you progress in your career, the easier it becomes – the job becomes tougher but you tend to have more control.”
Richards’ parting message to her female peers is to ignore the stereotypes about what good motherhood or good leadership looks like. “It’s important to find your own way and build the support around what you do,” she states.
And her advice to those aspiring to climb the career ladder? “Learn to take risks and listen to those around you. Don’t discount anything before you understand what it looks like. No matter how far you come in a career, the minute you stop listening is when you lose the opportunity to learn. It’s a key factor in making good decisions.”
About Melanie Richards
Melanie joined the KPMG UK board in 2012 and is responsible for leading on diversity and inclusion. She was appointed vice chairman of KPMG UK in October 2014.