Ofgem CEO Jonathan Brearley's speech to the Equity, Diversity and Inclusion in Energy Conference 2022
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It was great to be involved in 2019 setting this conference up and to start thinking about diversity in our industry. I just want to reprise some of the things we said then, and talk a bit about the role of this industry right now. Then I would like us to look hard at how far we have come and how far we might need to go.
So I want to go back to where we started, where we said the importance of diversity, inclusion and equality was all around our ability to create organisations that we want to work in and be part of, but principally our ability to do our job well. To understand our customers and to do all the things we need to do to meet their needs.
I am standing before you today in one of the most difficult times that our customers have ever been through in the energy industry. This industry is in turbulence, but also the lives out there of people who rely on us are in turbulence. Equally, it has never been more important for us to think about that transition we all know we are going on, to get to that future energy system. This is not a trade-off between low cost and environmental energy, but where our climate goals, our cost goals, and our security goals, are all aligned.
If we are going to do our job as an industry today to look after our customers, if we are going to take the population on that incredibly complicated journey to take us to where we need to be, we need to understand our customers. Now more than ever, we need to be able to make sure that we have our customers’ needs in the room when we are making decisions, not outside as a conceptual group that we deal with.
For me, that is why the issue of the diversity of our workforce, the inclusivity of our places of work, and the equality with which we treat each other is more important, rather than less important, than it has been before. The other thing I would just mention, which has probably not escaped the attention of people in this room, and certainly wont escape the attention of the senior teams in all the companies and organisations that work in energy, is that we are in a tight and tough labour market.
It is very hard for Ofgem to recruit, and I know it is very hard for companies to recruit. So not only is this about us being able to do our jobs properly, it is going to be vital if we are going to keep this industry populated with the best possible people to do the things we need to do. When I look at Ofgem, we have made some progress. We have some clear targets, for example around gender diversity; we have made some progress towards them. For example, 45% of our senior team are now women, compared to 36% when we started, with a target of 50% by 2025. Equally, we are increasing the number of non-white women: 7% of our leadership are now non-white women, up from 5%. So there is some progress there. Across the industry, we have somewhat increased the diversity of our leadership, and somewhat increased the board membership of females. We have now gone significantly further with executor directors.
However, the truth is the problems we are facing, and the data we are seeing, look very similar to the problems and the data we saw in 2019. So we are all going to have to think harder about how we imbed all of the things that we need to do in our organisations to make sure that we make the changes we need to make, to help the country make the changes it needs to make, to get to Net Zero.
I will share with you a couple of learning experiences I had in my first two years as CEO. When I came in, I was full of ideas about how we might change things. We worked really hard on the Ofgem senior team to get greater gender diversity. One experience I would take away is how conscious we need to be as an organisation. We had a reorganisation, not a nice thing for any organisation to go through. We put all of our senior leaders through a process to make sure that we had a fair process for allocating our senior roles in the organisation. The result of that was very gender balanced: we were around 50:50.
However, we had a few gaps that we had to fill, and fill quickly. So we fell back onto temporary promotions and people promoting someone they thought was great. The result in those appointments showed us what unconscious bias really means. Suddenly, we became a male dominated group once again. So the first thing I learnt is that you have to be quite conscious about how you are growing and evolving as an organisation. All of us have preferences, which mean we reach for who we know, and we reach for people like ourselves.
The second experience, and I am sure this has not escaped your notice, is that Ofgem has been through a couple of crises over the last six months! When you are in a crisis, you reach for what you know. If you are not careful, the decision-making structures, the way you organise yourself falls back to what you are more familiar with, and what you are more used to.
We have worked hard on diversity, but as an organisation, I believe we have to work much harder on inclusivity. I am conscious that when you are in virtual meetings, for example, it is usually the loudest that speaks up, usually that person who puts the ‘yellow hand’ up to speak, which is usually related to peoples’ confidence. What I have noticed when we are back in a room together around a table is that it becomes easier when chairing a meeting to try to bring people in. You have to be much more conscious in a virtual world.
What I have learnt over the last two years is that there is still huge ambition from me personally, and in Ofgem, but also an understanding that this is a complex issue. We have Lesley here who is leading our effort to make sure that we do better, and we continue to make the progress we need to. I am restarting reverse mentoring to make sure I understand the organisation, not only from my perspective, which is obviously a particular perspective, but also for those who work in the organisation. I have found that immensely useful.
Finally, we are very keen to ensure that we are balanced in our representation. When we talk publicly, we ensure that we divide 50:50 on gender. However, we have a long way to go. Two major things are on my mind. First, I do not think we know enough within Ofgem about our disabled workforce; I don’t think we have the data to know enough, even though we do monitor it. Secondly, in a world where you are seeing prices go up by up to £1,000 more than the year previously, we need to understand more about vulnerability and people who struggle.
The truth is that we, like many organisations, are not made up of a wide mix of socioeconomic groups. This makes us vulnerable to missing gaps, that we wont understand how a lot of this feels. When I look out across the industry, there has been progress, but I think there is more that we all need to do to make sure that we are pushing this as much as we are pushing the other things we do.
I will leave you with this final reflection: there was a question I saw coming into this which I think embodies the dichotomy, but also shows some of the perspectives, that can hold us back. The question was: ‘in an industry in crisis, how can we make sure that we focus on this as something important that we need to do?’ My view is that diversity, the richness of our workforce, the diversity of perspective around the table when we are making the big decisions, is one of the most fundamental success factors for making sure that we manage this crisis properly and that we get out of this crisis into a different kind of energy sector in the future.
So to summarise: first - great to be here! Second, I do think we have made progress since I was here last time. But thirdly, we have a long, long way to go. That is why I am really pleased we are launching a taskforce: the Tackling Inclusion and Diversity in Energy taskforce, or TIDE, that can, literally, ‘move the tide’. It is focusing on three really important things: firstly, improving data: not impossible and easy to do. Secondly, reaffirming our commitment to this issue. And thirdly, recognising that no one, including Ofgem, is a source of all best practice.
We have a long way to go. So let’s share our best practice, and make sure that all of us are able to make the progress we need to make.