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Digital Features

Why diversity on corporate boards is a business imperative

December 22, 2021 00:00 AM UTC
- Updated December 22, 2021 17:46 PM UTC

Board member leaders from numerous industries share insight.

Transcript
diversity on corporate boards. Why is it a strategic and a business imperative if you want to have diverse perspectives sitting around a table and you want to draw on those experiences and perspectives to get to a better outcome. The only way you're going to do that is by putting together a table of directors just like you do with your friends. That could bring different insights in different voices into the room. All the data shows that we get better outcomes when we have diversity and when I, you know, use the word diversity, I really think of diversity of thought and perspective and so, you know that generational, yes, that's cultural and ethnic, but gender. You know, so but to really getting to kind of diversity of thought and perspective and experiences and that drives better business outcomes, I think as the the norm become having a diverse, inclusive board and workforce that will only spill over to other uh, private companies as a business best practice. It's like what's a good business board governance practice. It doesn't matter if you publicly traded publicly traded companies are more scrutinized so they have to comply and compliant as you know, consequences. Private companies, you know, can can follow the same standards. The same actions, the same, uh, guidance in order to make sure they are Productive, high performance, desirable company in the Fortune 500 over 70 of directors are still white males At around 25% are female now. So that is great, But less than 10 have any racial diversity. Cultural change is very slow. And so if we don't have incentives, positive incentives to move that along with that along, then that will be very slow. Women bring additional skill sets not only to leadership, strategic leadership but to board um C. E. O. S in the executives. We can see in the C suite, women are good listeners and their collaborators. Um uh and and in terms of the the tumultuous times we live in now, I think their skill sets are much needed. So there are a few challenges that directors really need to look at to further diversify boards. The first one is turnover is swell and while there are board evaluations, column assessments that are done, how effective are they really if they're not really driving internally. So I believe that the key to accelerate turnover is more effective, a bored individual assessment and more candid feedback. The other challenge is also out there, there is a perception that there aren't enough qualified diverse candidates out there still here more often than I'd like, you know, kind of a frustration or a you know, a belief that like the talent's not out there and you really have to stop and you know, you know, correct that really the work is around job design and thinking about the role in a much more holistic way to really kind of step back and think what specifically do we need over this. You know, next several um board slots and then design around that, then that creates More opportunities to think more holistically about the role and when you start doing that, you open up possibilities for who, and how you're gonna look for board members. I think that the corporate boards in 10 years will look a lot different and there will probably be the parody of diversity. We want to see the things that the NASDAQ rules, the things that the California state rules are, are requiring. Now, I think that will happen by virtue of uh, you know, workers and professionals and qualified candidates working their way through the company. Um, and in that career pathway, my prediction for corporate boards is that they will be more diverse than they are today and that diversity will be at an accelerated pace as competitive. There's no question, but I really do believe that the content of the conversations that are having in boardrooms, that the expectations about millennial and gen z employees have, like what customers care about. You know, that that is really starting to take hold um in understanding about, you know, the role of board members, the role of boards, the role of, you know, corporations, um, you know, in ways that, that I really do think you're going to benefit society. That is exciting to me