04/02/2013 10:22 GMT | Updated 03/04/2013 06:12 BST

Legislation for Positive Discrimination Would Be an Admission of Failure of Leadership

Discussions of diversity in business have long focussed on gender equality - the pay gap between men and women remains unacceptably high at 9.6% and seven companies in the FTSE 100 still do not have any women on their boards, prompting a warning from Vince Cable that "doing nothing is not an option anymore."

Last week, however, the focus turned to ethnic diversity. The lead spokesperson on workforce development for the Association of Chief Police Officers, Sir Peter Fahy, called for positive discrimination to address the "embarrassing" failure of the police force to resemble the diverse make-up of the communities it serves. Only 3% of superintendents, chief superintendents and chief officers in England and Wales are black or minority ethnic.

Next came the proposal from Conservative MP Alok Sharma that the government should establish a voluntary code to encourage businesses to declare the gender and ethnicity of job applicants and successful hires. Sharma commented: "I am not talking about quotas. It's about information. All the companies I've talked to are incredibly keen on having diversity in their workforce, making sure they are representative of communities, so long as people get the job on merit."

Voluntary codes of the kind advocated by Alok Sharma can be effective - Lord Davies' recommendations on gender equality on boards have resulted in gradual progress in that sector and historically in the US, 'affirmative action' has been credited with making a positive contribution to the development of a black middle class.

The distinction between voluntary involvement and enforced quotas is a very important one. Though well-intentioned, the introduction of quotas can lead to accusations of tokenism, and create resentment and tension amongst the workforce - in particular given the implication that positive discrimination in favour of one group will inevitably result in negative discrimination against another. Whilst quotas can to some extent level the playing field, they can be more of a hindrance than a help in terms of relationships between employees and public attitudes towards minority groups.

However, discrimination and prejudice are powerful forces that must be tackled. The ambitions of minority groups may be dented when they have no role models to look up to, and recruiters can be guilty of unconscious biases which lead them to recruit in their own image.

There's no quick fix for this intransigent problem - and I believe that mandatory quotas, either for women or for BME employees - would be an admission of failure of leadership. Organisations should be motivated to take responsibility for diversity without being forced by legislation.

However, public targets do work, as demonstrated by the growing number of women on boards, up from 12.5% in 2011 to 15.6% last spring. Transparency, and requiring organisations to explain what they are doing to increase diversity, is key. This is not about political correctness - something stressed by both Fahy and Sharma - but about operational need and business success. Diversity is desirable and simply makes organisations perform better. British boards largely have a white, male face that does not represent the customers and communities they serve.

The fact is that companies that ignore calls for diversity and continue to recruit in the same mould are not throwing the net wide enough and will ultimately lose out. Progress is being made, but there is still a way to go towards achieving diversity, not just at board level but also in the talent pipelines that feed the top roles. It is vital that leaders and policy makers continue to call for businesses to make a public statement of the strategies they have in place to address this need.