New law on targets: how NN Group plans to get to work
A new law introduced on 1 January 2022 aims to create more balance in the ratio of men to women in senior management positions at large companies. NN Group has been working on greater diversity for several years. 'This law aligns with our approach and our KPIs for more gender balance in senior management positions.'
This article was originally published in Dutch in SERmagazine. The original text should be considered leading.
A new law introduced on 1 January 2022 aims to create more balance in the ratio of men to women in senior management positions at large companies. NN Group has been working on greater diversity for several years. ‘This law aligns with our approach and our KPIs for more gender balance in senior management positions.’
Original Author: Berber Bijma
No one denies the importance of a more balanced ratio of men to women in senior management roles. But for many companies, this has not moved beyond good intentions for a number of years. A new law that entered into effect at the start of 2022 is set to change this: listed companies and large businesses will have to take action to make the ratio more balanced.
New law means renewed focus
Working on greater diversity is not a new phenomenon for large businesses. ‘We’ve had our own approach to diversity for some time now,’ explains Carolien Handlogten, Head of Human Capital Development at financial services provider NN Group, which includes Nationale-Nederlanden.
Listed companies will face a gender quota for Supervisory Boards, and the 5,000 largest companies will have to set targets for their Supervisory Boards, Executive Boards and senior management. They will report annually to the Social and Economic Council (SER), which is setting up a Diversity Portal for this purpose.
‘This new law doesn’t involve us having to develop a new, separate approach,’ continues Handlogten. ‘We’re integrating the requirements into our existing approach. We see the new law as a renewed opportunity to create awareness of diversity, an additional chance to inform colleagues in our organisation about diversity and our strategy to tackle it. Our approach to more gender diversity in senior management aligns closely with the objective of the legislation.’
‘Working on diversity is the right thing to do’
In 2020, NN Group published the NN Statement on Diversity and Inclusion, setting out why the company is putting a lot of energy into diversity: creating an environment in which we can all be ourselves and are able to be at our best is ‘simply the right thing to do’.
Handlogten: ‘There’s been all kinds of research into the benefits of diversity: better decisions, better performance, better services. All this plays a role, but at the heart is our intrinsic drive: working on diversity is simply the right thing to do. We want to be a company in which our people feel respected and valued, where you don’t need to leave part of yourself at home. We see diversity as clearly being broader than just gender. Diversity is also about different generations, the LGBTQ+ community, cultural diversity, neurodiversity and physical diversity, just to name a few.’
Trainings, networking and meetings
Of course, you cannot achieve diversity simply by posting a statement on a website. In recent years, NN Group has been developing a whole range of activities and embedding structures in its organisation to ensure awareness and action. ‘For example, we’ve introduced unconscious bias training. Everyone has biases, but we can only do something about them if we are aware that they exist. The Management Board and the Supervisory Board have also completed the training course.’
‘We also have a network approach. For women, for example, we have a Women in Leadership network. Our Wo(men)talk sessions are meetings for women and men – and we’re seeing more and more men attend – where we discuss possible differences between men and women and how to use one another’s strengths. We recently had an online lecture given by a professor from New York about the female brain. Our Management Board is also involved in various networks and meetings. This shows that we are really taking diversity seriously.’
Own target for the Management Board and the next layer of management
In addition to awareness campaigns and networking meetings, NN Group is setting concrete goals. Handlogten: ‘In our organisation as a whole, the ratio of women to men is 48:52, which is pretty good. But women are not as well represented in the more senior management positions. At the end of 2019, we set our own target: we want to have 40% women on the Management Board and the next layer of management – all managers who report directly to the Management Board – by 2023. Last summer, the figure was 34%.
The new law does not stipulate how businesses should define their senior management. For NN Group, senior management includes all managers who report directly to the Management Board. It is an NN Group non-financial key performance indicator (KPI) for women to make up 40% of this management layer in 2023. ‘If you formalise this ambition, it acts as a signal. It doesn’t mean you can stop making an effort. That’s why we’ve embedded diversity in our structures as much as possible.’
NN Group wants to expand the target group covered by the 40% KPI in the near future to bring more balance to the male/female ratio within its senior management, and in doing so, to expand the succession pool for senior management. Handlogten: ‘We’re working as much on awareness and mindset as we are on focus and attention to gender diversity. In addition, we have a mentoring programme for and by women and targeted talent management process for senior managers. This covers topics such as succession planning, and we discuss the development and visibility of colleagues. Combining awareness and focus gives us better insight into where we have female talent in the organisation and to what extent these women are progressing through the organisation. This insight also gives us the option to channel that progression more, where necessary with external candidates.’
Take the time to expand the talent pool, too
‘We’re noticing that it’s important to work on succession planning in the longer term. If a position becomes available on the Management Board or the management layer below, you want to have enough diversity among potential candidates in the layer below that. That’s where we still have work to do. It takes time to build a broad pool of potential successors.’
According to Handlogten, investing in succession and the talent pool is one of the most important tools to combat the frequently heard argument: ‘there just aren’t that many women available’. ‘As far as we’re concerned, that argument is too simplistic. We need to cast the net more widely and accelerate development. If you take steps to find candidates and you adapt your processes to fit, you have a greater chance of finding the right talents.’
Handlogten certainly expects the networking meetings that SER is organising about the new law and the Diversity Portal to be helpful. ‘All companies are faced with the same challenge. It would be great if we could learn from and help one another. Diversity is not something that you can tackle overnight. Nor can you calculate exactly how to achieve your targets. Furthermore, not all activities that you undertake in the field of diversity have a tangible result, but can nevertheless be very valuable, such as our unconscious bias training.’
SER Diversity Portal
The gradual entry quota and the obligation for ‘large’ businesses to record targets and action plans for greater diversity are included in the new law, which entered into effect on 1 January 2022. This is the More Balanced Ratio of Women to Men on Management Boards and Supervisory Boards Act (Evenwichtiger verhouding tussen mannen en vrouwen in bestuur en raad van commissarissen), and was introduced as a result of SER’s advice Diversity at the top.
Every year, listed companies and around 5,000 large businesses are required to report their targets, action plans and results achieved. The SER has been given the statutory duty to facilitate this report and to make companies’ results visible. The SER has set up the SER Diversity Portal for this purpose. The portal will be expanded over the coming weeks and months. See www.diversiteitsportaal.nl (in Dutch).
Like other companies, NN Group was involved in the establishment of the SER Diversity Portal. ‘We’re pleased to have been asked to provide input,’ says Carolien Handlogten. ‘We were involved in both the content and on a practical level, for example in the design. I’m pleased that we can contribute to the practical feasibility of the new obligations.’