Kinnevik’s greatest asset is and has always been our people - in our own organisation and in our portfolio. As such, attracting and retaining top talent is a key priority. Kinnevik regards diversity, equity and inclusion as core levers for value creation, and we make full use of the opportunities that arise from employing a team with different backgrounds and perspectives.
1. 10% Female Capital Allocation
On a two-year rolling basis, 10 percent of new capital to be invested in female founded or led companies, from the 2019 Annual General Meeting (”AGM”) and onward
As more than 95 percent of global investments still go to companies with all-male founder and management teams, we believe there is good reason to continue pushing the industry towards closing the gender funding gap. Per year-end 2023, on a two-year rolling basis, 7 percent of Kinnevik’s investments into new companies was invested in female founded or led companies, and since the 2019 AGM, the share is 15 percent. For the follow-on investments made during 2022-23, 42 percent were made into businesses founded by women, and since the 2019 AGM, the share is 26 percent.
2. Follow-On Investments
Only make follow-on investments in companies that are making sufficient progress in relation to diversity and inclusion
Kinnevik has continued to make all follow-on investments in portfolio companies conditional upon satisfactory progress on DEI (diversity, equity and inclusion). All potential follow-on investments are evaluated on DEI performance as part of the investment evaluation process. During 2023, 91 percent of our portfolio companies made progress on their respective DEI ambitions and gaps.
3. Ensure Portfolio Progress
Achieve annual incremental progress across portfolio on relevant diversity, equity and inclusion efforts
For 2023, we set portfolio progress targets aimed at driving strategic DEI engagement. To achieve these, we have actively supported our companies with recruitment, talent management and best practice sharing between companies, among other initiatives. As a result, by the end of 2023, 81 percent of our portfolio companies had implemented DEI data collection processes (target 70 percent), 94 percent had a relevant DEI strategy (target 80 percent) and 84 percent had set DEI targets (target 80 percent).
Kinnevik invests in the power of technology to make life better for people around the world, by providing more and better choice. To do that, we and the businesses we invest in, need to truly understand their customers. This is why it is vital that our organisation and portfolio companies’ teams reflect their diverse customer base. Improving diversity and inclusion (“D&I”) will bring clear business benefits through improved financial performance, a higher degree of innovation, better decision-making and value creation over the long-term.
To support our investee companies and their management teams on the journey towards creating a more inclusive culture and increasingly diverse teams, we have created a D&I Toolkit (the ”Toolkit”). The Toolkit is meant to inspire and serve as a practical guide on how to structure and initiate D&I efforts. While we recognize that there is no secret recipe for achieving D&I - all companies must assess their own needs and consider the relevant organisational context at hand - we believe the Toolkit includes many good first steps which anyone can implement.
The Toolkit comprises eight sections covering key D&I topics to consider at the outset of your D&I efforts. The first four sections focus on how to define your D&I ambitions, creating a baseline and ensuring you have processes to measure and assess progress. The last four sections focus on concrete actions to help you achieve your ambitions and build a sustainable and inclusive workplace.
Below is a smaller extract of the full Toolkit provided to our portfolio companies.
Believing you are meritocratic will not get you anywhere. Improving D&I, and specifically creating an inclusive culture, is a long-term project dependent on people believing in the intrinsic value of D&I.
The first step towards a more diverse and inclusive organisation is understanding the benefits of D&I. When you have done your research and know why D&I matters to your business, communicate your commitment to the team - being explicit with your ambitions and transparent with shortcomings removes confusion and supports buy-in.
What gets measured, gets managed - like any other strategic area of business, you cannot make informed decisions about D&I without understanding the underlying data and where you are currently.
When you have created a baseline and communicated the results to your team, the next step is to agree on focus areas and actions for improvement – including clear and ambitious KPIs and targets.
*It is important to consider anonymity and legal restrictions when collecting D&I data. You should always inform the team of the data collection and make participation voluntary.
Example KPIs to measure -
Progress on D&I is unlikely to happen without the influence and support of senior managers and the board. By having management show active support for D&I and a genuine appreciation of difference, you will foster a culture of inclusion.
Practice amplification -
Amplification is the practice of noticing when someone from a minority in a group discussion makes a good point, repeating it to give it greater emphasis and finally crediting the person who originally made it. If this is done systematically, it can help counter inherent group and social biases.
Managers can practice amplification by –
D&I efforts should be measured with the same scrutiny as any other business objectives. By setting clear expectations on your D&I ambitions through KPIs, organisations can ensure they stay focused on making progress and creating accountability.
The organisaton’s D&I expectations and KPIs need to be clearly communicated and easily accessible, not only to the affected teams but to everyone.
Further, progress on your D&I targets and KPIs should be linked to the remuneration of the management team and relevant team members. If you don’t hold key decision-makers accountable, you are in practice signaling that D&I is not a business priority.
Make sure your policies and processes are not unconsciously discriminatory against certain groups. Instead use them to highlight and showcase your commitment to D&I.
Take a look at your flexible working, benefits and parental leave policies – are they unconsciously disadvantaging a certain group of employees?
Creating a sense of belonging in the workplace has been proven to significantly improve performance. There are concrete initiatives and actions you as an organisation can take to create an inclusive culture – encourage ERGs, offer voluntary training on D&I related topics, review your branding profile or start a D&I taskforce to facilitate the discussion.
A D&I Taskforce is a voluntary employee group representative of the entire organization which focuses on implementing and driving the business’ D&I initiatives. It runs as a think tank and support network for management as well as holding them accountable to the organisation’s D&I commitment and targets. It also promotes social accountability within the team and facilitates an ongoing discussion on D&I within the business.
Being serious about improving the diversity of your team means that you need to make it intentional in the hiring process.
A common misconception is that reaching a more diverse talent pool also requires reducing your standards. However, the question ”how do we hire more diversity, without lowering the bar?” places the blame for performance (or missing the “bar”) on the individual without taking into account that the ”bar” is likely biased against the candidates. Data shows that race and gender do not have any correlation with performance, meaning that the idea that gender or race has an effect on performance is itself a form of bias. You do not have to lower your standards but you cannot hire the most easily available candidate. Instead, you need to invest the time necessary to find the best candidate.
When hiring for more diversity, the main priority needs to be to ensure that the pool of candidates is varied and diverse from the start - if there is only one black person in your candidate pool, there is statistically only a very small chance he or she will be hired.
You do not have to lower your standards but you cannot hire the most easily available candidate. Instead, you need to invest the time necessary to find the best candidate.
When hiring for more diversity, the main priority needs to be to ensure that the pool of candidates is varied and diverse from the start - if there is only one black person in your candidate pool, there is statistically only a very small chance he or she will be hired.
When you have created a more inclusive recruiting process and invested in creating a diverse team, the next challenge is fixing the “leaky pipeline”, i.e. the failure to keep diverse talent through to the senior levels of leadership
A first step towards sealing the leaky pipeline is measuring and monitoring aggregate level diversity data on promotions to better understand if they are proportional to available diverse talent. This data can be used to benchmark how departments are performing in terms of diversity and analyse if and how biases might be creeping in, e.g. how part-time or flexible working may be affecting promotions.