Why brokerages need to double down on diversity in leadership

Despite all the attention on diversity, equity, and inclusion (DEI), the picture of leadership diversity in brokerage firms is mixed.

The 2024 Canadian Underwriter Brokerage DEI survey asked nearly 300 brokers how they would describe their organization’s leadership when it comes to representation from diverse groups. The results show an increase in those who say there is “no diversity” or “homogenous leadership representation” at 23%, up from 19% in 2023.

Less than half of brokers (48%) say there is “some diversity” (meaning mostly homogenous with the inclusion of some diversity in gender, race, sexual orientation, etc.), compared to 51% in 2023. An additional 16% (versus 17% in 2023) indicate their leadership is “diverse,” with more than 50% of the leadership team belonging to a historically marginalized or underrepresented identity group. And 13% (up from 12% in 2023) say their organization is “leading,” with senior leadership reflecting a vast amount of diversity.

Brokers were also asked how they would describe their organization’s corporate culture when it comes to diversity and inclusion. On the positive side, there is an increase in the number of brokerages reporting their culture as “leading” (36% versus 31% in 2023), meaning their organization has made diversity a core principle and follows workplace diversity and inclusion best practices. However, there’s also been an increase in brokers who say their organization has “not started” (18% versus 15%), meaning there has been no mention, effort, training, or communication whatsoever around DEI.

As the needle moves forward and backward, it points to the need for a greater push for diverse leadership at Canadian brokerages.

Why does diverse leadership matter?

While diversity efforts seem to have stalled at many organizations across many different sectors, a commitment to diverse leadership is more important than ever. It’s not only a moral and ethical imperative, as some experts suggest, but there’s a strong business case for diversity in leadership.¹ According to McKinsey & Company, it’s stronger than ever.

In its recent global report, Diversity Matters Even More, McKinsey & Company found that leadership diversity (including gender and ethnic diversity) is associated with higher financial returns, greater social impact, and more satisfied workers. More specifically, top-quartile companies had a 39% greater likelihood of financial outperformance versus those in the bottom quartile. Meanwhile, those in the bottom quartile for gender and ethnic diversity are 66% less likely to outperform financially on average.²

Even as companies are under pressure to maintain financial performance in a rapidly changing business landscape, the report says creating a culture of transparency and inclusion can help deliver on that performance.

Many benefits of diverse leadership ladder up to better financial performance. As leadership consultant Ellie Shefi says in Forbes, “Diversity in leadership means greater depth and breadth of experience and perspective, which in turn allows for a greater ability to relate to employees, clients and prospective clients.” This facilitates innovation, which is critical to capturing and maintaining market share.³

Diverse leadership can also help attract and retain top talent. Executive coach Miriam Meima tells Forbes, “Emerging leaders and top performers want to see themselves reflected at the top. End users are best served by having their point of view represented by someone at the table.”⁴

Benefits for brokerages

What’s the view from brokers? More than one-half (54%) of brokers say they have left or considered other opportunities for any of the listed reasons in the survey, with the top ones being toxic co-workers/environment (34%), lack of career advancement opportunities (23%), and unmanageable workload (23%). Those who work at self-described diverse and leading companies are less likely to leave their employer or consider other opportunities for any of the listed reasons (33%).  

Those in leading organizations are also more likely to be aware of the needs of new employees. They have noticed new employees are more diverse (87% versus 42%) and they are mentoring someone in their organization (75% versus 46%) – an important finding since mentoring is known to positively impact retention.⁵

Conversely, when asked about the biggest threats to them personally if their organization does not address diversity, just over one-half (52%) of brokers agree they are personally threatened if their organization does not address diversity. The top cited personal threat faced by not addressing diversity is poor workplace culture/environment (28%).

It’s often said that DEI starts at the top, and the survey bears this out. Overall, the top actions that have been used to increase diversity in brokerages are leadership actively supporting DEI initiatives (40%), increased focus on hiring diverse talent (36%), and the company publicly promotes their DEI values, priorities, and commitments (35%).

Diverse leadership also impacts people’s views on DEI across the organization. Brokers working in an organization with leading diversity in senior leadership are more likely than those with none to agree that adopting DEI best practices is better for business (83% versus 44%).

As the research shows, diversity in leadership matters and brokerages would be well served to embrace DEI at the highest level. As HR expert Poly Panou writes, “Diversity in leadership is more than just a checkbox—it’s a mosaic of experiences, perspectives, and backgrounds that enrich every facet of decision-making. Embracing diversity isn’t just the right thing to do; it’s a strategic advantage that fuels creativity, fosters innovation, and drives bottom-line results.”⁶

This article is part two in a three-part series on diversity and inclusion, based on the 2024 Canadian Underwriter Brokerage DEI survey. Stay tuned for the next instalment on the rise in polarization.

Sources

¹ Culture Ally, “Business Case: Inclusive Workplaces Drive Growth”

² McKinsey & Company, “Diversity matters even more: The case for holistic impact,” Dec. 5, 2023

^3,4 Forbes, “14 Benefits of A More Diverse Leadership Team,” June 24, 2021

⁵ Monster, “Mentors are Key to Success and Retention”

⁶ Brainz Magazine, “The Blueprint For Effective Leadership in 2024 Using Diversity,” March 11, 2024