Regardless of external pressures, the best boards are evolving to become more inclusive as companies aim to meet the shifting demands of their customers, markets and the communities they serve. The essence of optimal boards is rooted in an enduring commitment to mirroring both their community and stakeholders, guided by the understanding that diverse teams — whether in the boardroom or across their broader business — are the key to achieving long-term company success.
Korn Ferry's recent study of 183 board members shows that 81% recognize the benefits diversity brings, from better problem-solving to innovative ideas. However, true inclusivity goes beyond having diverse faces at the table; the optimal board creates cultures for all members to contribute — where every voice is heard and has influence.
Optimal boards are comprised of four critical factors across areas where they can have the most impact on their diverse members: encouraging self-reflection and feedback, adopting inclusive onboarding practices, empowering directors in decision-making, and making adaptability and inclusivity top priorities.
Self-Awareness Is Critical
Regular evaluations of the board and its individual members are essential to fostering a culture where everybody's voice is heard. Each director is brought into the boardroom for their specific expertise and wisdom. Harnessing this experience and insight is essential for good governance.
This need to emphasize open communication through self-reflection is especially important for boards, where only 58% of board members receive regular individual feedback.
While boards can gather this feedback formally or informally, the common denominator is the chair — arguably the most influential member of the board. This leader should regularly have individual post-meeting conversations with each member to understand if they have a point of view that wasn't expressed but is nonetheless valuable. Formal board evaluations on an individual basis can similarly achieve the same goal, allowing the lead director to aggregate feedback to understand areas of improvement to ensure that each member is actively showing up.
The most successful boards are those that strongly advocate for these feedback mechanisms. Most of our clients across sectors have begun to embrace this practice with strategic intention. We see this practice from the largest companies in the Fortune 100 to the highest growth companies in the Fortune 500 and Fortune 1000. Best-in-class boards across sectors, including industrial, consumer, retail, tech, energy and health care, embrace this practice of self-reflection and evaluation with regularity.
Inclusive Onboarding Should Be Standardized
One of the underappreciated realities of the boardroom is that there's experience and wisdom. Although newer members are often experienced executives, onboarding is more than just learning about the company. Understanding the evolving culture and strategy is critical, which means that sometimes the best way to acclimate to the board's already established dynamics is as an active observer as opposed to speaker.
Despite newer members being more prone to this issue than others, there's an opportunity for companies to implement board buddies or mentors to support all members, especially as only 38% of directors surveyed by Korn Ferry said they had one.
Every company onboards in their own unique way, but optimal boards work toward identifying ways to leverage individual members' contributions so that they're delivering the most impact possible. A mentor for more than just the newest members can help facilitate this dynamic.
Every Voice Should Feel Comfortable as a Decision-Maker
A chairperson's ability to set the tone to make sure that all board members' voices are heard is instrumental in creating an inclusive culture.
While certain sectors, like consumer and retail, have often led in terms of diversity and inclusion on their boards to align with the makeup of their stakeholders, we've also observed other industries prioritizing inclusivity's strategic value. For example, an industrial company that we recently advised intentionally brought on new directors to not only navigate an ongoing transformation, but simultaneously create team-building moments before and after meetings to share ideas around technological innovation as well as growth and development — key priorities in executing the company's strategy.
Such an environment — where equal contributions and constructive dialogue on important issues are commonplace — is imperative considering that 65% of women feel they influence decision-making compared to 81% of men. There are ample opportunities for members to hold relationship-building meetings while also discussing strategic issues, yet it's important to go beyond regular meetings to facilitate a cohesive team dynamic on the board.
Inclusivity Should Be a Top Priority
As companies are increasingly adding new members onto their boards, the chairperson should champion inclusion by creating spaces for everybody's ideas. Even though 82% of board members surveyed feel like this leader effectively encourages discussion and diverse perspectives, our research reveals disparities in how white directors and leaders of color perceive their influence.
With 68% of diverse leaders believing they've influenced the board's decision-making compared to 78% of white leaders, its clear that individual directors should play a bigger role in empowering other members — especially if they notice somebody's opinion isn't being heard or embraced.
There's several examples of major big-box retailers, banks and health care companies doing a remarkable job of this. Meanwhile, financial services and transport companies are increasingly bringing on different board members to align with their markets and customers' new priorities. In this sense, boards need to continuously ask themselves how their team is growing to be as effective as possible to help execute their strategies. Only then can they truly have an optimal board.