Companies say that they’re prioritizing board diversity, but changes have been slow to manifest.

Just 30% of Fortune 500 board seats are held by women, and 45% by people of color, according to Deloitte’s latest Missing Pieces report. When it comes to women of color, however, that number drops to just 8%, with many once-promising board diversity trends moving in the wrong direction. 

Roosevelt Giles, a board member at Just Capital, and chairman of Stakeholder Impact Foundation, which offers free training programs for future board and C-suite leaders, advises aspiring directors, with a special emphasis on women and people of color. He says that board candidates are typically told to “network, network, network,” put together a one-page résumé, engage with a search firm, and then sit back and wait for an email. But for candidates from marginalized backgrounds, who continue to face barriers in the corporate world, he believes it’s essential they proactively shape the way their abilities are viewed and take an extra step to stand out among the stacks of résumés boards receive.

As soon as a board applicant is told that a company wants to meet them for an interview, he says, the candidate ought to begin working on a detailed “board document” to be delivered to the company several days before the interview date.

Speaking at the Fortune Impact Initiative 2023 conference in Atlanta last week, Giles explained that this document should speak to the applicant’s views on three topics about the target company: The value the corporation brings to the world, the organization’s culture, and the risks it’s facing. “When I receive this document outlining how you view us from a value perspective, how you view us from a sustainability perspective, now you get my attention,” Giles said. “Because I can go directly to this and see where you fit.”

Another benefit of submitting such a board document? “You’ll own the interview,” Giles told Fortune in a subsequent conversation. “They’re going to be asking you questions about your report.”

The research that candidates put into creating the board document also sends a secondary message—they know how to dig into complicated issues that board members are expected to understand, says Giles. That includes cyber risk, inflation, ESG responsibilities, and talent management. Gone are the days of “compliance governance,” Giles told the audience, in which boards were mostly preoccupied with accounting rules. While financial oversight is still necessary, today’s boards need to practice “stakeholder governance,” which means they are balancing the needs of not only investors and regulators, but also employees, suppliers, and the community. “Board members are expected to do research, because you have all of these issues come in before you hit the board [meeting],” Giles said.

For applicants from underrepresented groups, Giles also recommends emphasizing more than just one dimension of their work history. Think about the way people explain their educational background, listing their college major and minor. In the same way, he said, if they’ve been a CMO or a CHRO for several years, that’s a “major.” “But what is your ‘minor’?” he asked. For example, has the candidate always made technology, DEI, or sustainability a part of their work? If so, they can make that crystal clear so that boards can see the breadth of their skills and interests. 

By the way, none of this advice is meant to shift the burden of diversifying boards to individuals. The onus is still on companies to give all candidates fair consideration as they refresh or expand their boards, says Giles.

He also predicts that going this extra mile will soon be necessary for all board-ready executives looking to land their first director’s seat, whether they’re part of a majority culture or not. The risk facing companies is so significant, he says, that the old boys club model of recruitment “is slowly phasing out.”

Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan

Noted

“We spend a lot of time focusing in on the board directors that don't have any technology expertise and giving them the basic introduction to things so that they feel like they can participate. And as you might guess, nine times out of 10, the most intriguing, demanding questions come from the non-technology board members. They ask the really insightful question that no expert was going to ask.”

—Phil Venables, CISO, Google Cloud, speaking during a panel discussion on reporting cyber risk to the board at Diligent’s Modern Governance Summit in Orlando last week.

On the Agenda

👓: California, a climate law trailblazer, is leading the way again with a new rule that will impact companies that earn over a billion dollars in revenue and do business in the state. This weekend, California governor Gavin Newsom said he would sign a climate bill mandating that large public and private companies disclose their direct and indirect greenhouse gas emissions. The law exceeds the climate-reporting standard proposed (but not finalized) by the SEC, which only applies to publicly traded companies.

📹: Watch the entire panel discussion on board diversity at Fortune Impact Initiative 2023 (mentioned above), here. The conversation, moderated by Fortune’s leadership editor Ruth Umoh, featured Roosevelt Giles; Deborah Draper, the filmmaker who directed OnBoard, a documentary about the first Black woman to sit on a corporate board; and La Nise Hagan, senior vice president of human resources at the development and recruiting firm OneTen, which is focused on Black talent.

📖: The advisory committee to the U.S. government’s Cybersecurity and Infrastructure Security Agency submitted several new recommendations for new cyber policies recently. One suggestion would require that board members of public companies be educated about cyber risks.

In Brief

—The latest episode of The Morning Show, a series on Apple TV+, reenacted (with some embellishments) the cyber attack that hobbled Sony and left employees' personal email open to public scrutiny in 2014, Time writes. Naturally, the board of the show’s fictional media conglomerate plays a starring role in the story. 

—Members of Gen Z are finding their way onto corporate boards, Fortune reports, but young directors can face ageism if their boards are not intentional about creating an inclusive environment.

 —Howard Schultz’s third tour of duty as a leader within Starbucks has come to an end. The former CEO, who had been asked to return twice following his original stint, just resigned from the coffee chain’s board.

—Whether it’s due to poor performance or questionable behavior, corporate boards are ditching their CEOs at a surprisingly high rate this year. More than 1,000 CEOs have left their companies in the first seven months of 2023, according to a report by recruiting firm Challenger, Gray & Christmas. That’s 33% more than the same period last year.

—Shawn Fain, president of the United Auto Workers, is bringing attention to soaring CEO-to-worker pay ratios among automakers, as strikes unfold at the country’s largest car companies: GM, Ford, and Stellantis. Workers at nonunionized shops like Tesla “are scraping to get by so that greedy CEOs and greedy people like Elon Musk can build more rocket ships,” he told CBS’s Face the Nation this weekend.

The Long Read

Succession planning at the hedge fund Bridgewater Associates appears to be in disarray. Citing mostly anonymous sources inside the firm, the New York Times published a revealing feature about the company’s founder Ray Dalio, who retired last year but could return to the firm if its performance falters under a clause within his contract. Dalio, a billionaire and a director at Bridgewater, has reportedly floated the idea of leading a new company fund. At a board meeting on the topic, he was “the only one to speak in favor of his own idea, according to three people with knowledge of the discussion,” the Times writes. “If Mr. Dalio gets his way,” the story explained, “he will essentially be competing with those to whom he ceded control, giving the firm’s investors a choice between backing the Bridgewater founder’s ideas or those of his successors.”