- Introduction and Scope
1.1 Diversity in the workplace has been a long-overlooked facet of corporate social responsibility. Promoting equitable inclusivity that attempts to remediate conventional patterns of underrepresentation and oppression is a prime example of good governance and social responsibility. Communities like transgender folk and disabled persons have long been oppressed and denied equal opportunity. The lines of reasoning adopted by the Davies Report for more diverse corporate boards in the UK are instructive: “it is about the richness of the board as a whole, the combined contribution of a group of people with different skills and perspectives to offer, different experiences, backgrounds and life styles and who together are more able to consider issues in a rounded, holistic way and offer an attention to detail not seen on all male boards which often think the same way, and sometimes make poor decisions.”[1] These guidelines pave the way for companies to correct social injustice. They allow an untapped pool of talented and capable individuals to contribute to moving the corporate world away from a largely homogenous existence and into an inspired future. By doing so, they stand to gain a diverse workplace that allows for new ideas, and fresh perspectives that will eventually lead to a more successful and effective corporate world.
1.2 These guidelines are voluntary in nature.
1.3 These guidelines are for all companies that recognise the need for corporate social responsibility (CSR) and, by way of dealing with one such facet, intend to or have initiated measures to increase workplace diversity and inclusivity, especially for traditionally underrepresented and marginalised communities. Whilst the guidelines stipulate recommended, minimum provisions which are voluntary, businesses are encouraged to act beyond such provisions and adopt institutional mechanisms that complement and streamline the induction of these guidelines in moving towards a more just and responsible corporate world.
1.4 These guidelines are being issued under Section 508(c) of the Companies Act 2017 to “carry out the purposes of the Act”. Under the Preamble of the Companies Act, such purposes include the “promotion of interests of…general public, inculcating principles of good governance…” Measures to tackle the marginalisation met by specific communities are an example at the very forefront which has not been taken up.
- Objective
The objective of these guidelines is to demonstrate how greater workplace diversity tending to communities that have historically been marginalised, is among the primary forms of CSR. These guidelines are intended to promote the development of company frameworks that effectively incorporate measures for marginalised communities.
- Diversity Goals
Companies are encouraged to have a diversity policy endorsed by the board of directors (“board”), reflecting and understanding their commitment to workplace diversity, specifically for transgender and disabled communities, thereby ensuring that:
- Diversity and workplace inclusivity are incorporated into the business vision, code of ethics, and strategy of companies.
- Companies’ commitment to diversity is integrated and leads to a board-level, comprehensive inclusivity policy.
- The policy is executed through the formation of a diversity committee that routinely sets targets for the company to achieve and periodically reviews them through the issuance of a yearly report. Companies are encouraged to make this report public and submit it to the SECP.
- Educational sessions are held so that board members are adequately sensitised and possess the requisite understanding and expertise of inclusivity measures to make informed decisions.
- Diversity-related communications are reviewed and approved by internal and external shareholders.
4. Consultative Committee
Companies are expected to form a Diversity and Inclusivity Consultative Committee, which should include members of communities that have traditionally been marginalised. The committee may be entrusted to ensure transparent, specialised supervision of such activities and periodic reporting to the Board of Directors in the adoption of diversity and inclusivity policy and reporting its progress.
5. Areas of Interest
A company’s diversity policy is expected to clearly determine priority areas for the furtherance of marginalised communities’ inclusion in corporate workplaces. This will include areas of interest that the company intends to undertake by way of ongoing and future endeavours. These should include:
- Reservation Targets:
Companies are expected to set their own annual targets regarding the proportion of representation they intend to give, overall, to marginalised communities in their company. Furthermore, companies are expected to give due weight to diversity and inclusivity when looking at senior executive and corporate board roles as well. For such senior roles, it is also advisable for companies to come up with predetermined targets of representation to be achieved (by way of example, a company may undertake to have 40 percent of its board comprised of women, with another 3 percent being reserved for transgender persons).
Marginalisation may be perceived on lines of gender, ethnicity, and societal inequalities, and should include inter alia transgender persons, disabled persons, and women. Whilst not exhaustive, a useful guideline for companies to consider are underrepresented communities made up of individuals who self-identify along lines of ethnicities that have historically been sidestepped (such as Balochis) or someone who self-identifies as transgender (as provided for, by way of right, under the Transgender Protection Act 2018).
By way of example regarding annual targets to be set, a company may undertake to ensure that 3 percent of its total workforce is made up of transgender persons. Such an undertaking will be enforced internally by the concerned company itself, however, companies meeting their targets (as made public in annual reports) may be entitled to benefits such as tax exemptions and soft loans. Such measures have been undertaken in countries such as Argentina and have proved to be great successes. Furthermore, whilst no company will be expected to face undue hardship in such an endeavour, companies are expected to set and achieve reasonable targets that evince an active intent to take up CSR for all segments of marginalised communities.
- Training Programmes:
Companies are expected to undertake measures that ensure any voluntary reservation is not mere tokenism that defeats merit. This will be done through programmes that will identify individuals from marginalised communities and then place them in training and networking programmes to bring them up to the standard dictated by society and beyond. Such training should allow representatives of marginalised communities a path to make their way towards the upper rungs of management
Partnerships with local communities and organisations should be fostered to the end of broadening horizons and getting in touch with qualified individuals from marginalised communities. Norway’s strict implementation of quotas regarding the placement of women on corporate boards was crucially supplemented through similar programmes which achieved successful placement rates above 40 percent.[2]
(c) Internal Education:
Companies are encouraged to undertake measures to educate employees towards the furtherance of an inclusive work environment that understands societal deficiencies and attempts to move against the further entrenchment of biases. Particular attention should be devoted to employees in management positions so that they may effectively uphold companies’ diversity policy.
Companies may undertake surveys and questionnaires internally to gauge their current diversity and what can be done to improve matters. The findings may then be forwarded to various stakeholders (such as board members, the consultative committee, and shareholders) who will then devise an actionable way forward.
(c) Investment:
Companies should identify individuals from marginalised communities and areas where such individuals are commonly found. Having done so, it is expected of companies to invest in programmes that allow marginalised people a chance to improve their skills and employability, towards a more equitable future. By way of example of what such investment would tackle, the 2017 Buenos Aires survey in Argentina found that only 9% of trans people had a formal job whilst 70% were sex workers.[3] Similarly, data from studies mirror a similar scenario in Pakistan, where majorities of transgender persons ranging from 65 to 85 percent in the country’s largest provinces such as Punjab and KPK are entirely uneducated.[4] The transgender community of Pakistan has long been downtrodden and left behind. Appropriate investment from socially responsible companies would allow these fetters to be broken and usher in a corporate world that seeks to uplift.
6. Allocation of Resources
Companies are expected to earmark quantifiable resources for CSR methods, a portion of which is to be allocated towards selected initiatives that seek to remedy prevalent marginalisation. The method of allocation of resources or identified criteria must be predetermined, duly endorsed by the board and form part of company policy.
7. External Assurance
7.1 Companies are encouraged to undertake arrangements for obtaining assurance from an external party. The external assurance is expected to be implemented in a manner that is systematic, documented, evidence-based, and characterised by defined procedures. Such parties must be independent of the undertaking company and any findings or reports issued by the former must be taken into account and made public.
7.2 Explanatory provision on external assurance: external assurance denotes firms seeking an independent evaluation of performance data related to CSR measures. In the context of remedying marginalisation at the workplace, firms are expected to seek external reassurance as to the credibility and accuracy of their CSR and marginalisation-centric initiative reports from expert third parties. Doing so will enhance firms’ social responsibility credibility and shall aid in the continual improvement and verification of firms’ data collection methods, reporting processes, and accountability.
8. Disclosure and Reporting
Companies are expected to report and consolidate all relevant material regarding measures taken to increase workplace diversity and inclusivity into a yearly annual Diversity Report. The Report should include all objectives, targets, strategies, and partnerships undertaken at the start of the year by companies. The Report should mention the extent to which it met its objectives at the end of the year. The report should be made publicly available on companies’ websites (as well as other forms of public media) and forwarded to the SECP.
[1] Department for Business, Innovation & Skills, ‘Women on Boards’ 9 [2011] <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/31710/11-745-women-on-boards.pdf> accessed 21 August 2022
[2] International Labour Organization, ‘Improving Gender Diversity in Company Boards’ 6 [2020] <https://www.ilo.org/wcmsp5/groups/public/—ed_dialogue/—act_emp/documents/briefingnote/wcms_754631.pdf> accessed 22 August 2022
[3] Marcela Valente ‘Transgender job quota law seen ‘changing lives’ in Argentina’ (Reuters, 25 June 2021)
[4] Naila Nazir and Aqsa Yasir, ‘Education, Employability and Shift of Occupation of Transgender in Pakistan: A Case Study of Khyber Pakhtunkhwa’ [2016] <https://www.researchgate.net/publication/320876676_Education_Employability_and_Shift_of_Occupation_of_Transgender_in_Pakistan_A_Case_Study_of_Khyber_Pakhtunkhwa> accessed 21 August 2022
Authors
Smam Mir, Team Lead & Coordinator (smamabdallah10@gmail.com)
Leila-Maria Faddoul, Research Assistant (leilamaria.faddoul@gmail.com)
Caleb Strangl, Research Assistant (calebstangl@gmail.com)
Kate Maguire, Research Assistant (kmaguire12@fordham.edu)
Mahbano Kazmi, Research Assistant (mahbanokazmi@gmail.com)