Diversity and Inclusion in the Boardroom

It feels like now is the right time to write about board diversity and inclusion. As always in these Savvy Director™ blog posts, we’ll eventually guide the conversation to how an individual board director might approach this topic in the boardroom.

This week, I asked Alice Sayant, co-founder of DirectorPrep.com™, to share her views on the topic.

Alice’s thoughts on board diversity and inclusion

First of all, let me say that I believe board diversity and inclusion are important subjects for our consideration because, if we believe in social justice, it’s just the right thing to do. If the word justice implies fairness, then social justice is the concept of fairness as it manifests in society – including equal opportunity for participation in societal and economic institutions like corporate boards.

The four essential goals of social justice – human rights, access, participation, and equity – are important personal values for me, and I want to align myself with organizations and boards that not only espouse those values in their marketing campaigns, but that actually live up to them.

Earlier this week I read a passionate article by Mark Ritson writing in MarketingWeek, called “If ‘Black Lives Matter’ to brands, where are your black board members?” The following passage really resonated with me:

“If you care about black lives, you don’t get inspired by an Instagram post. You get inspired by black faces in the boardroom. Companies need to become the change they are tweeting about. Walk the walk before you tweet the tweet.”

Ritson went on to say, “If these companies really wanted to do something meaningful, they would get off social media and get on with changing who is in charge.”

I realize our blog readers expect The Savvy Director™ to focus not on social justice per se, but on governance-related matters like why diversity matters to their boards and how they, as directors, might help to further diversity and inclusion in the boardroom if they so choose. So here goes.

What do we mean by board diversity?

I think it’s fair to say that we don’t all mean the same thing. The current emphasis, which is to increase the number of women on corporate boards, has attracted a lot of attention from regulators, investors and the public. If this was the only measure of diversity, we would acknowledge that progress is being made, albeit very slowly.

But surely achieving real diversity involves more than just ensuring the board includes at least one woman? What about other factors such as race, ethnicity, visible minorities, age, and ability/disability?

In discussions on this topic, lots of people told me that instead of looking to diversify board composition along demographic lines, we ought to be satisfied with a definition of board diversity that refers to diversity of thought, diverse perspectives, and diverse experiences.

Let’s consider the Canadian Board Diversity Council's definition of diversity, which includes twelve categories.

1. Seven categories identify personal characteristics ─ age, gender, ethnicity, Indigenous peoples, people with a disability, those who identify as LGBTQ, and geography.
2. Five categories identify backgrounds – education, industry experience, management experience, functional area of expertise, and international experience.

That’s a lot of diversity! But I have to say, this second group of categories gives me pause. It’s not that I think these are unimportant characteristics for an effective board. Not at all. My problem with these categories is that they seem very, very safe.

It’s an approach that makes it easy for a board to say it has achieved diversity, without actually undergoing the inconvenient and uncomfortable need to reach out beyond its usual network. “Look, we’re as diverse as we need to be. We’ve got directors from outside our industry, different professions, even someone from outside the province. That ought to do it.”

Diverse perspectives come from different life experiences

My own view is that there is no better guarantee of diverse perspectives than including people from the first seven categories. Diverse perspectives arise from different life experiences, not just different careers. Just think for a minute about how your own life experiences have formed your opinions, your values, and your own unique perspective.

For my own part, how different is my life experience from a person of color, or an Indigenous person, or a person with a disability – and therefore how different is my perspective on any given topic? For more on this subject, see our Savvy Director blog post ‘Where you stand depends on where you sit.’

The Russell Reynolds report ‘Different is Better’ delves into this idea a little bit. It describes how an individual’s perspective is influenced by three sets of attributes that shape how they approach situations and how they respond to others.

1. Experiential attributes such as functional experience, industry experience, accomplishments and education. – What do I know? Where have I led? How do I analyze?
2. Demographic attributes including gender, race, region and generation. – Where am I from? What have I experienced? How long have I been at this?
3.  Personal attributes including personality, interests and values. – What is important to me? What intrigues me? How do I react?

Why real diversity should matter to the board

Thank goodness, there is growing agreement among directors and governance experts that diversity is important. They cite reasons such as it minimizes Groupthink; it deepens the pool of qualified director candidates; and it communicates a message to stakeholders about the organization's values and social commitment.

All directors interviewed for the Russell Reynolds report saw the benefits of diversity as established beyond dispute.

“Diversity and inclusion are not just the right thing to do but are important to the business agenda,” said one director. “Boards are at their best when there is diversity of culture, thinking and perspective.”

The report offered many reasons for boards to consciously pursue more diversity.

• Having multiple views on the possible outcomes of any action makes for more robust decision-making.
• A diverse board allows for the group to better anticipate and consider the concerns and perspectives of all key constituencies.
• A board needs to draw upon a range of experiences in understanding opportunities, anticipating challenges and assessing risks.
• A board needs to constantly challenge itself to keep pace with the changing dynamics a company faces. This is best done through a robust dialogue of differing views.
• A range of perspectives leads to collaborative tension that is the essence of good governance, allowing the board to ask probing questions and tackle challenging issues.

Now let’s face it, sometimes boards are merely trying to satisfy stakeholder demands for a more diverse demographic. This is certainly true of the current push for more female representation. Many female directors report they are approached for boards only because they represent a diverse demographic. But really, their true value comes from bringing a specific, needed perspective to the board – a perspective that is heavily influenced by their gender, among other factors.

As one Russell Reynolds interviewee said, “Being a woman was instrumental to my first board. After that, it was reputation as a good board member.”

Casting a wider net

There is natural tendency for directors to turn to their own networks to identify candidates for their board. The problem is, this can easily give rise to self-reinforcing homogeneity. We are simply not aware of how limited our own networks are when compared with the universe of qualified candidates.

It is still very common to hear “There are no qualified (fill in the blank) candidates in the (fill in the blank) industry to serve on our board.” But – surprise, surprise – there are!

We just have to go out of our way to find them. We may have to try some creative approaches, use different recruitment tactics, and consider persons with backgrounds that are a little outside our pre-conceived notions.

Here’s a few ideas:

• Contact an advocacy group such as Women in the Boardroom, an organization focused on helping qualified women find board seats.
• Hire a search firm.
• Conduct a LinkedIn search.
• Use the ICD’s confidential board matching and referral service.

Most often, boards that were initially reluctant to bring on a “diversity director” discover that the new perspective adds to their effectiveness. The benefits are particularly powerful when it reaches a critical mass (research suggests at least three directors of varied perspectives) to support broad thinking.

This is about serving the needs of the organization. Good governance requires having a breadth of perspective and bringing in ideas from elsewhere. If a social justice imperative is also satisfied, then that is a very good thing!

What can an individual director do?

Well, The Savvy Director™ blog always comes down to this. What can I, the individual director, do about this? How do I influence my board to consider a broader, more inclusive approach?

• When the topic of director recruitment is raised, you can speak up about your beliefs in a non-threatening way.
• You can ask probing questions that address the elephant in the room. Well-placed, thoughtful questions can help lower resistance. If you’re a regular reader, you know that DirectorPrep is big on questions. Check out this previous blog post for more about asking questions. “It’s not just what you ask, but how you ask it.”
• You can help the board cast a wider net by thinking about potential directors within your own broader network.
• You can be a champion for a person with a diverse perspective. It’s a fact that most directors reach their first board seat because someone actively championed them.

All this requires you to demonstrate courage. But isn’t that why you’re there – to contribute your unique perspective and influence board decisions?

And if you are the sole woman – or the sole Black person, or Indigenous person, or person of color, or member of the LGBTQ community, or person with a disability – serving on your board, then good for you. Speak your truth. Make your voice heard. Know that your perspective is valued.

Resources:

• Russell Reynolds. Different is Better.
• BoardSource. Now That We Know Better.
• Financial Post. Canadian Council of Business Leaders Against Anti-Black Systemic Racism Announces Formation; Launch of BlackNorth Initiative
• Kieran Moynihan. Re-thinking your board composition, diversity and skillsets to enable your organisation adapt and thrive in the coming challenging years.

Thank you.

Alice

Scott’s takeaways:

I’d like to thank Alice for offering her insights about diversity and inclusion in the boardroom. Here’s what I took away from today’s blog post.

• Companies need to become the change they are tweeting about.
• Boards benefit from diverse perspectives, and diverse perspectives come from a variety of experiential, demographic and personal attributes.
• There are deliberate steps boards can take to find qualified candidates from diverse demographics.
• Directors can broaden their search outside of their usual networks.
• Directors who value diversity in the boardroom need courage to encourage their boards to adopt a more inclusive approach.

Leave a comment below to get in on the conversation.

Thank you.

Scott

Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online hub with hundreds of guideline questions and resources to help prepare for your next board meeting.

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