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Sector Focus: EDI reporting- what, how, why?

01 Nov 2022 Expert insight

by PX Media / Adobe

This content has been supplied by a commercial partner.

Equality, diversity and inclusion (EDI) is a hot topic and high up on the agenda for membership organisations.

There is no specific guidance on EDI reporting, but the Charity Governance Code, the Companies Act (in particular S172) and the regulations for gender pay reporting, may assist as a starter.

The Charity Governance Code

The Code, while not mandatory, sets out best practices in charity governance. Principle 6 is equality, diversity and inclusion and by adopting this principle a charity should have EDI embedded, will have reduced obstacles to participation, be more inclusive, and have a more effective board with different perspectives, experiences and skills.

The four key steps of Principle 6 for the board to undertake are:

  1. Consider their approach to EDI using available data and consider diversity in its own work, and when recruiting. What is the charity’s culture?
  2. Set a clear organisational approach to EDI with context-specific and realistic plans and targets.
  3. Ensure appropriate arrangements for monitoring performance to achieve its EDI plans and take appropriate action as required.
  4. Regularly publish its performance information and learnings, showing its progress towards achieving EDI plans and targets.

The Companies Act requirements

Again, there is no specific guidance within the Companies Act, however S172 reporting – the duty to promote the success of the company – states that a company should maintain high standards and act fairly, and includes the following mandatory disclosures within directors’ reports of large companies:

  • How directors promote the company’s success for the benefit of its members.
  • How directors meet the interests of the company’s employees including disabled employees.
  • How directors foster the company’s business relationships with suppliers, customers and others.
  • The impact of the company’s operations on the community and the environment.

What about gender pay reporting?

The regulations require all private and voluntary-sector employers with 250 or more employees to publish data on their gender pay gap.

The six key figures on which you will have to report are:

  • Average gender pay gap (mean and median).
  • Average bonus gender pay gap (mean and median).
  • Proportion of male and female employees receiving bonus payments.
  • Proportion of male and female employees by quartiles (ie when divided into four groups ordered from lowest to highest pay).

What else?

So, what information might you include in your EDI report? Those charged with governance need to consider: Why report? What do you want to achieve? What are your objectives for reporting?

Some common EDI data reported on includes:

  • EDI statement.
  • Gender pay gap.
  • Highest to lowest paid employee ratio.
  • Ethnicity pay gap.
  • Employee data – age, percentage of employees with a disability, ethnicity, gender, sexual orientation, religion.
  • Member data – age, percentage of employees with a disability, ethnicity, gender, sexual orientation, religion.
  • Gender and ethnicity composition of the board.
  • Equality policy.
  • Diversity and inclusion policy.

Many membership bodies include detailed narrative but limited statistics. This could be due to challenges with gathering and retaining the data or the resources required to gather and interpret the information available.

The board needs to consider whether it will prepare a separate EDI report, include relevant data in the annual report, or include details on the website.

Why report on EDI?

Finally, before starting to gather data, the board needs to consider the aim of the report. Some key questions to consider are:

  • What is your purpose/objective for the report?
  • What are you trying to achieve?
  • What are your future goals?
  • How are you going to publish the report?
  • How are you going to benchmark your data?
  • How will the report influence future policy/strategy?
  • Who is the report for?

So, take a step back, answer the above questions and decide on your objectives. Review your statistics, consider benchmarks, set targets for the next 12 months, five years. What does EDI look like for your organisation?  

Kathryn Burton is partner and head of professional institutes and membership bodies at haysmacintyre

 

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