Our world is changing, and it’s changing fast. Whilst the idea of a “fast-paced corporate world” had come to feel like something of a cliché, the changes we have been forced to make in the course of 2020 have once again made it particularly relevant. Whether responding to direct pressures from the global health crisis, absorbing secondary impacts on markets and industries, or adjusting their personal approach to remote-working, boards and directors have faced unprecedented changes and challenges this year.
But change also brings opportunity.
The COVID-19 crisis represents an inflection point in many ways, compelling organisations to advance strategies in numerous areas- from digital transformation to a reassessment of the business’s physical footprint, workforce and supply chain. However, there is one long overdue change in particular that will help to drive sustainability and success in the world we are entering. That change is board diversity, and the time to change it is now.
Setting the tone on board diversity & inclusion
Governance professionals and regulators often talk about “tone from the top” and the fundamental role the board plays in setting the culture of the organisation. This is an accepted part of board responsibility and, at its logical conclusion, it requires that boards are diverse and inclusive, representing a broad spectrum of lived experiences and perspectives. If the organisations boards serve – and whose tone they set – are to perform responsibly as corporate citizens and succeed in a diverse and multicultural world, then that diversity and multiculturalism – in terms of gender, ethnicity and age among other factors must be reflected in their own composition.
Right now, the lack of diversity on corporate boards prevents organisations from realising the imperative for diversity and inclusion across the entire corporate ecosystem.
This recognition is the first step. If organisations are to improve diversity and inclusion at all levels, setting objectives and putting actions in place to achieve them must follow.
Measuring what matters
At Diligent’s recent Modern Governance Summit our theme was “Leading in the Moment” and several of our speakers explored how organisations and governance professionals can act on improving diversity.
Two inspirational leaders from diverse backgrounds- technology and engineering leader and board director Merline Saintil and Wes Moore, CEO of the Robin Hood Foundation – both emphasised that the well-known management quote: “if it matters, it gets measured and if it’s measured, it matters” must be applied just as rigorously to diversity and inclusion.
Merline stated: “As a business you need to measure diversity and inclusion like you would any other objective.” Wes added: “For example, if we’re talking about participation of African Americans in the workforce, it means we can’t just say “it’s good to have black workers across the organisation.” It actually means putting benchmarks and knowing what proportional representation looks like across all levels of the organisation and having something to be accountable to.”
Wes also placed diversity, equity and inclusion firmly in the realm of what it means to be a successful organisation, saying: “It is not just a nice-to-have…if you are serious about truly going after market share, understanding your customer base, capturing capital – wherever that capital happens to show itself – then DE&I cannot be just a response to a moment, or a standalone. It needs an ethos. [It needs] to be not a lane but a lens.”
Taking calculated risks on board appointments
Changing the make-up of corporate boards and executive teams will take a powerful shift. It requires organisations to step out of their comfort zone and seek skills and talent from beyond their usual sphere. This can be seen as a risk, one that Merline Saintil encouraged organisations to embrace, saying: “Take a chance on a first timer —a CEO who needs her first gig, or a board director who is trained and needs you to take a calculated risk and say yes.”
Another MGS 2020 speaker—author, board director and one of the first female African American CEOs, Shellye Archambeau—put corporate risk-taking into perspective, saying: “Breaking through barriers means taking risks,” and pointing out that risk-taking is inherent in successful companies: “The goal is not to eliminate risk. The reason why corporations were first enabled as an entity was to create an environment and a mechanism for people to come together to share risk. So, companies are supposed to take risk…in our governance role it is important that we are encouraging risk… the right risk.”
To foster this approach, governance professionals need to examine existing succession planning processes and work with board leadership to both remove bias and widen the pool of candidates in the recruitment phase. Looking further ahead organisations also need to proactively develop a diverse pipeline of potential hires.
Making a personal commitment
Merline Saintil emphasised the personal responsibility of leaders and governance professionals to lift up those in their networks whom she called “hidden figures”—women and people of colour who have the skills and experience to take up board appointments but lack the connections or exposure to opportunities that will enable them to realise their potential. She called on leaders to “send the elevator back down” and “lift the men and women in your network who are underdeveloped and under supported in your organisation and give them the opportunity.”
Taking that principle of activating networks as a force for good is the rationale behind Diligent’s Modern Leadership initiative. It aims to leverage the breadth of influence of Diligent’s 19,000 customer companies and nearly 700,000 executive users to address the lack of access to the talent pipeline as well as the lack of transparency in the board recruitment process. Diligent is building a diverse database of directors and board-ready candidates and making their profiles available within our app so all our community can access it.
We’re also inviting the community to nominate rising stars from within their networks to become part of the database with the goal of building a strong pipeline of talent that can make boards better.
Finally, Shellye Archambeau emphasised that the key to achieving any goal is to be intentional, saying: “Decide what your goal is. Ask what has to be true to achieve that goal and put a plan in place to make it true.” For businesses to achieve the goal of board diversity, it must be an intentional, measured objective and organisations must put a plan in place to make it happen.
At this time of rapid transformative change, fixing board diversity is one of the most equitable, responsible and valuable things we can strive for, allowing us to build not only better businesses but a better society.
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