Time for boards to break down their own barriers.
One of the common barriers when it comes to getting more diverse voices in the boardroom is not seeing beyond your own networks.
Case in point. In an effort to diversify the board of a Fortune 500 company, a board member recommended his neighbor who was professor emeritus of information technology at a prominent university. The professor had great subject matter expertise on information technology but very limited business knowledge. He didn’t read the board materials in preparation for the board meeting which became obvious by the questions he asked during the meetings. He was ultimately not nominated to stand for reelection.
Employee as Director
Culture of Inclusion
Such narrow outreach has contributed to limiting the process of diversification in the boardroom, but mandated or not, the diversity imperative for corporate boards is here to stay. Recent activism around workplace equity is helping to move the needle but it’s still moving at a glacial pace.
Although we are seeing some momentum, change takes time and dedicated effort. Diversity just doesn’t happen unless there is a belief and commitment to the aspiration of having a more diverse board.
Research studies have repeatedly shown that market caps are bigger and above-average financial returns are in the top quartile when there is gender, racial, and ethnic diversity on corporate boards. Not to mention the social and cultural lift that occurs when customers and employees can see people “like me” in powerful positions.
There are multifaceted reasons as to why many companies don’t make more progress diversifying board composition. An honest and difficult assessment of these factors will help corporate boards make progress in a meaningful way.
Here are some of the barriers to board diversification to help identify actions that boards can take to make more progress with diversity:
• It’s not what boards are used to doing; attracting diverse candidates requires a different approach. Many boards rely on their own personal networks which tend to be more homogeneous. Recruitment processes that ensure diverse slates of candidates must be adopted.
• Artificial barriers come into play; the traditional ‘go to’ profile tends to be a sitting CEO, which limits the pool of available diverse candidates. Focusing on the skill sets the board needs rather than the position title will broaden the field.
• There may be a lack of clarity for who is accountable; boards operate as a group of equal peers and it must be clear who is responsible for championing diversity.
• Perhaps the benefits of a diverse board are not understood; committing to diversifying a board is not an easy effort. It’s hard work and diversity doesn’t just happen. It requires discipline, dedication, and a commitment of time.
• We may not recognize our own biases; we tend to be comfortable with others who are ‘like us.’ A willingness to lean into discomfort and move beyond our own comfort zone is an important part of increasing diversity and being successful.
• Sometimes tokenism gets in the way; be clear about the skills sets you need and attract strong, qualified, and diverse candidates which will go a long way to building a strong and diverse board.
It’s time to look in the mirror. Having open and frank discussions about these impediments will help you begin the journey to diversity your boardroom. Once you understand what might be keeping you from achieving your aspirational goals to diversify your board, you will be more able to build a pathway forward that will be successful.
We are all responsible for ensuring the importance of diversity does not stall. In the end, the people making decisions should look like the people affected by those decisions. I look forward to not having to talk about women or people of color leaders and am hoping for a day we just talk about really effective directors.
Kathy Higgins Victor is a corporate board director for a Fortune 100 company and president at Centera Corporation, an executive development and leadership consulting firm, located in Minneapolis, who advises board of directors, CEO’s and C-suite executives on leadership effectiveness, executive and CEO succession, and corporate governance.