It’s time to make board diversity an expectation, not just a priority
It’s no secret that if you look at the senior ranks of many corporations, including the C-suite and the board of directors, there are more white men than there are women or people of color.
The numbers bear this out. A 2019 study by Deloitte found that Fortune 500 companies have 22.5% women and 34% women and minorities on their boards. We believe in taking consistent action with a long-term and intentional view to advance meaningful and systemic change for diversity, equity, and inclusion in the workplace.
Five years ago, Hershey was hovering around the 35% mark for board diversity, in line with most of corporate America. Today, our 12-member board is 58% diverse, with five women directors and two male directors of color. The rich discussion and broadened perspectives generated by our diverse board has helped to improve talent development opportunities for women and people of color, increase partnerships with diverse suppliers, and discover more relevant ways to market to diverse audiences.
One of the most important things companies can do to diversify their boards is to make inclusion an expectation rather than just a priority. Having lived in the business world for quite some time, I know there’s a crucial distinction between the two.
When there’s a sense of responsibility at the very top of the organization, and the CEO and chairman of the board insist board diversity is something that must happen, you get very different results than simply saying it’s a priority.
This requires real conviction on the part of leadership, but it has the effect of flowing throughout the organization and changing business as usual, including how vacant board seats get filled.
For example, companies regularly use search firms to fill board vacancies. A very important step in achieving greater board diversity is using firms that are owned and operated by women or people of color. Leaders need to set clear expectations about the level of diversity they want to see in candidate slates and the importance of building a diverse talent pipeline. In addition, it is essential to leverage internal leaders, board members, and business resource groups to discover executives with unique and diverse backgrounds.
As part of their search, companies can also broaden their scope for the type of candidate they’d like to bring onto the board. It’s too easy to start and end your criteria with “must be a current or former CEO of a publicly traded company.”
Amazing talent can be found in a variety of other roles. To thrive in today’s market, CEOs need a board with a mix of philosophical and operational leaders. That means including current and former CIOs, CFOs, COOs, and general counsels, among other high-level positions. The pool should include academics and standouts from the nonprofit world too.
The bottom line? Diverse board talent is out there. You just have to put in the effort to find it. There are a growing number of companies that are getting it right, including Starbucks, which recently named its first Black female board chair (nearly half of the board is women); Archer Daniels Midland Co. (half of its board is women or people of color); and Macy’s (half of its board is women or people of color). Others are making strides. But more progress needs to happen.
These diverse board members can speak their minds, challenge the status quo, and do what is in the best interest of all stakeholders. It is important for diverse board members to bring their unique perspective and life experience into the strategic decision-making process.
It’s one thing for the board to read about unconscious bias or institutionalized racism and understand it in an abstract way. Hearing personal examples from a colleague, who is seated at the boardroom table, and has lived it, makes it real.
But it’s not just about having diverse board members. It’s also about selecting directors that have demonstrated a record of inclusion before joining the board. That means asking candidates about the diversity, equity, and inclusion policies at their organizations and what the diversity numbers are for their executive teams and overall staff.
We’re optimistic that this rigor is becoming more mainstream. We see companies starting to voluntarily seek out board diversity for a host of reasons, ranging from the assessment of the changing business landscape to corporate governance demands of institutional investors.
As boards become more diverse, it will only create more inclusive companies—a virtuous cycle. So, as executives, let’s lead by example and make board diversity an expectation and cultural norm in our institutions across the country.
Michele Buck is CEO and chairman of the board of directors of the Hershey Company.
Victor Crawford is chief executive officer of the pharmaceutical segment at Cardinal Health and a member of the board of directors for Hershey.
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