‘Organisations need to demonstrate greater resolve in recognising and nurturing talent from different cultures and backgrounds, and implement sustainable programmes that will encourage them to stay and progress to leadership positions,’ says diversity champion and author Karen Loon.
Loon, a former accounting professional with a portfolio of directorships in Asia, has written a book that draws on her experience of leadership along with her own research. In Fostering Culturally Diverse Leadership in Organisations: Lessons from Those Who Smashed the Bamboo Ceiling, she outlines what organisations should consider in developing recruitment and retention strategies that address cultural diversity.
‘I was a leader, but I also had experience of being diverse’
Exodus of talent
A fourth-generation Chinese-Australian, Loon, who has spent much of her career in Singapore, observed the frustrations of senior professionals from ethnic backgrounds failing to progress to leadership roles in her home country of Australia, leading to an exodus of talent. Many corporates in Australia are, she says, ‘paying lip service’ to employees by having events such as ‘cultural diversity days’ without doing anything in substance that would help employees from non-white backgrounds achieve leadership positions.
Similarly, many organisations, Loon says, set quotas or targets but fail to implement real change, particularly in addressing issues such as the underlying culture and how people behave and interact.
It was while she took up a short-term role in Australia that Loon became aware of how Asian-Australian professionals often struggled to make it into leadership positions.
Loon’s observations led her to delve further into the issue of leadership diversity. ‘I was a leader but I also had experience of being diverse,’ she says. ‘Since then, I’ve had a real passion to try to give back even more in the diversity space.’
Challenges for women
Loon’s desire to improve the prospects for future finance professionals did not just focus on race. As a female leader, she has experience of the challenges of making it to the top and feels that helping women to aim for the upper ranks within an organisation – whether in the C-suite or in a partnership position – is important.
‘I want to support the next generation of women in leadership roles,’ she says.
‘Given the shortage of talent, organisations need to keep those who can add value’
Diversity champion
Karen Loon holds a portfolio of directorships with a number of organisations. She is an independent director, audit committee chair and risk committee member at a Singapore subsidiary of a Swiss private bank; a governing council member of the Singapore Institute of Directors; a director of INSEAD Directors Network; and a member of the finance committee at the Singapore University of Technology and Design.
Slow progress
Loon is concerned that progress in ethnic diversity still remains slow. ‘There is less knowledge and awareness on how to increase cultural diversity, particularly in my home market in Australia,’ she says. ‘As employees become increasingly vocal and given the shortage of talent, organisations need to keep those who can add value.’
In 2019, she embarked on an executive master’s degree at top business school INSEAD, where she carried out research into the recruitment and experience of Asian-Australians. Her thesis, which she completed in 2021, is the basis for her book.
Loon’s research included interviews with 30 partners in large professional services firms and seven leaders from sectors including financial services, government and the legal profession. She found that those who made it into leadership positions tended to be better at managing stress, as well as being more open to learning about new cultures and systems, and interacting with new people.
Loon hopes that her findings will resonate with organisations; one chapter offers guidance on how to create the right environment and implement change programmes that will encourage leadership diversity both in terms of ethnicity and gender.
Time to talk
Key to improving diversity is embracing a culture of psychological safety in teams. This is achieved by creating an environment where everyone feels comfortable talking about their feelings and anxieties.
‘People need to look for sponsors; the sponsor won’t just go looking for them’
‘Reflective environments are really key,’ she says. ‘People have a lot of stresses, both work- and non-work-related, and if they aren’t able to speak about them in an environment where they feel safe, sometimes they default to behaviours that don’t support diversity and inclusion.’
‘If people understand themselves and how they interact in stressful situations, and are open to learning, they will be the ones who are able to progress in the long run,’ she says.
‘When you are from a minority background, it can be more challenging because you often feel rejected. You may not feel you can belong.’
Sponsorship success
Loon’s study also showed that the support of sponsors plays a central role in the success of aspiring leaders. Unlike mentors, who provide advice, sponsors are people within the organisation who usually have some clout, and are willing to invest time to lobby for promotions and other opportunities.
‘My personal experience, and what I found from my research, showed that it’s very important to have mentors and sponsors. You need someone who is in a leadership position to advise you on what to do,’ Loon says, adding that it is crucial to develop such relationships in the early stages of a career and the benefits can work both ways. ‘People do need to look for sponsors, though; the sponsor won’t just go looking for them.’
Organisations also need to encourage their leaders to break out of the tendency to sponsor people who are just another version of themselves, Loon says, which deters others from seeking out leadership roles.
‘When you are from a minority background, it can be more challenging because you often feel rejected’
While the need for sponsorship is particularly important in larger professional services firms, Loon believes that the principles outlined in her book can be applied to different types of organisations keen on increasing leadership diversity.
‘If companies are serious about increasing diversity, they need to try and make sponsorship formal and systematic,’ she says. ‘As part of the culture of an organisation and as part of the role within a senior leadership team, leaders have to bring through candidates who are different.’
Ultimately, Loon says, diversity is good news for organisations, pointing to the fact that, in many countries, investors may expect to see people from different backgrounds on the board or in leadership positions.
‘Similarly, having more women on boards, like all other aspects of diversity, means that organisations are bringing in greater minds, which hopefully will lead to better decisions overall.’
More information
For more on diversity, visit ACCA’s Inclusion in action hub, which includes a selection of inclusion articles from AB.
