The UK's venture capital firms are still behind on implementing diversity and inclusion policies, despite ramping awareness of the issue across the industry.
The findings come in Diversity VC's latest report, titled ‘Venturing into Diversity and Inclusion 2019’, which is supported by Capital Enterprise, an advocacy group for UK startups – with recommendations including appointing a diversity and inclusion champion, mandating fathers take parental leave and increasing parental leave pay above statutory minimums.
This follows on from a broader report published earlier this year looking at the makeup of the UK venture capital industry and its continuing struggles with diversity and inclusion.
The report is an aggregate of findings from interviews with 30 UK venture funds. It found that 47% of the funds canvassed had no policies in place to promote diversity in its recruitment practices.
Some 60% of funds still didn’t have a diversity and inclusion champion or lead in their firms. A further 43% had no flexible working policy in place, and funds often still had the minimum statutory maternity and paternity leave policies in place.
"It is clear that whilst funds now understand that this is important, many do not know where to start," as Shriya Anand of Diversity VC and Bain & Company stated in her introduction to the report.
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Check Warner, CEO and co-founder of Diversity VC, said: “The results are disappointing, but not surprising. There is much more to be done to ensure that venture capital firms are fairer and more inclusive employers; and provide fair access to capital for entrepreneurs from diverse backgrounds. As an industry, we are still very early in addressing this issue, and there is a lot more work required."
The practical steps include appointing a diversity and inclusion champion; reviewing HR policies including parental leave; broadening sources of dealflow beyond traditional channels and doing more to guide portfolio companies to build an inclusive culture of their own.
"Most of the funds lacked a clear strategy for promoting diversity and inclusion, either internally or in their dealflow, and had often tasked individuals that experience disadvantage or discrimination to create policies that address this," Warner added.
HR policies and parental leave
HR policies and parental leave are particularly pertinent to this wider industry issue. The report recommends implementing flexible working – including working from home – policies; mandating that fathers take parental leave; increasing the parental leave pay above statutory minimums; and introducing job sharing.
As Reshma Sohoni, founding partner at Seedcamp observed in the report: "The VC industry is very much about what you’ve done lately. I was lucky enough to be active in my nine months of pregnancy so I only ‘lost’ six months. But that loss of six months felt brutal upon return. I was missing the new networks, rusty on pitches, not connected into the dealflow, missing half a year of operations of our companies, and so forth. Essentially you feel lapped in a marathon and it is very difficult to come back from. You know you will have to run twice as fast to catch up with the elite."
Warner even spoke of seeing younger women in the industry ‘crowdsourcing’ parental leave policies in a popular Whatsapp group, because they didn’t have one in their firms. So pregnant members of the group were essentially asking their peers what the parental leave policies were at their firms in order to bring it to their own management.
"As an industry, we must properly champion and support diversity and inclusion. We must do better, and I hope this report catalyses more action," she added.
The report also forms part of the ongoing OneTech programme, which aims to connect founders from under-represented backgrounds to opportunities in the London tech startup community.