The retailer's gender diversity phenomenon is about finding the best candidates, not tokenism
For the first time in its 53-year history, Best Buy will have a woman in the corner office.
This week, Best Buy announced Corie Barry, the electronics retailer's chief financial and strategic transformation officer, will become CEO in June, replacing Hubert Joly who is also chairman.
Barry will also get a seat in the Best Buy boardroom while Joly transitions to the newly created role of executive chairman; bringing the total members of the board to 13, including seven women.
Best Buy joins General Motors in recent news about a corporate board tipping to mostly women. According to Automotive News: “Women will become the majority on the board of General Motors this year after two male directors retire. It's a first for an automaker and places GM among a handful of companies with roughly the same number of men and women at the highest level.”
Diversity and inclusion is becoming a focus for some top corporate leaders, including Best Buy, but the priority of the board has always been on finding the best candidates for the c-suite and boardroom.
“CEO succession is one of the core duties on any board and our goal in this regard was to pick the person best suited for the business as it is today and as we believe it will be in the future,” Kathy J. Higgins Victor, a Best Buy director since 1999, tells Directors & Boards.
“The board built its ideal candidate description and, to our delight, Corie Barry fit it exactly,” she continues. “The fact that she was a woman is something we are very proud of, but it was not our first goal. With that said, when our new CEO joins the board, we will become majority female, something that does not happen by accident.”
(Related article: Best Buy’s Road to Gender Parity in the Boardroom.)
Indeed, increasing diversity in the top ranks of Corporate America has been a slow process.
Women now hold 24, or 4.8%, of CEO positions at those S&P 500 companies, according to Catalyst; and the most recent data from governance research firm Equilar shows that among the Russell 3000 board seats, women held only about 18%.
The persistently low number is causing growing unease for company leaders, many of whom have accepted the evidence that gender equity on boards bolsters governance and the bottom line. Gender equity in the boardroom is also an environmental, social and governance issue, and one that many institutional investors have focused on. And there's the small but growing movement in the United States to mandate more women on corporate boards, including a law that passed in California last year, and a proposed bill in New Jersey.
While mandates may be needed to move the ball forward, Best Buy's Higgins Victor believes the board has to adopt “a foundational belief that diversity is important to our business, our employees, our customers and our shareholders, and to long-term value creation.”
As for finding the best person to lead a corporation, and also making diversity a priority, Lisa Walker, managing partner of the DHR International's global industrial practice, offers some best practices:
Making championing women a performance metric the board uses to evaluate the CEO and executive team.
Addressing subtle or unconscious bias – especially in regard to risk rewards/penalties, aggressive attitudes and behavior and other gender bias behaviors.
Encouraging a local critical mass of women in the junior executive ranks to provide a support system for their female peers and reduce isolation as women progress up the career ladder.
Providing mentoring and career development for diversity talent earlier in their careers. Typically, they have fewer role models and more bias to deal with and mentorship can help address this.
Boards need to “focus on talent rather than gender,” advises Tomas Chamorro-Premuzic, chief talent scientist at Manpower Group, a professor of business psychology at University College London and Columbia University, and author of “Why Do So Many Incompetent Men Become Leaders? (and How To Fix It)”. “That would not only lead to more women in leadership, but actually more women than men in leadership. Women are more competent and have more of the soft skills that are needed to be effective leaders today: EQ, self-awareness, humility, integrity and coachability.”
It’s all about focusing on succession planning, maintains Higgins Victor.
“CEO successions are ideally done when a company has a strong strategy in place and an internal candidate who is prepared for the role,” she stresses. “In Best Buy's case we were fortunate to have both.”