The unprecedented events of the past year have increased awareness around issues of diversity and inclusion and leaders and companies are responding with not just talk, but action. The business commitment to making boardrooms more diverse is beginning to pay off and the percentage of women joining boards has reached a new record high. This is encouraging. But it’s only the starting point.
How do we leverage this momentum to not just advance the progress but also accelerate and sustain its impact so that companies and society, as a whole, can fully reap the benefits that increased diversity promises? Creating an environment of belonging and inclusion in the boardroom (and beyond) is key.
As a public board director and a member of the public board community, I’ve heard many board members and potential board members share their cautious optimism while also (in almost the same breath) pointing out that boards are still generally made up of mostly like-minded people with similar backgrounds who know each other well and board appointments are made by relationships, networks and word of mouth.
In other words, it’s too soon to start the festivities. Acknowledging progress is important while also remaining mindful and focused on areas for continued growth.
Over the last few years, there has been a shift in mindset leading some states to implement legislation to include more women on boards. With women being over 50% of the population and making an estimated 70% of buying decisions, having their voices and input in the boardroom is simply good for business. One fashion footwear company geared towards women and known for their all-male board recently added their first female board director due, in most part, to shareholder pressure.
This is the result of a groundswell of advocacy. Investors, shareholders and the public want greater diversity and are demanding it. Simply put, people want to invest in and work for companies that value diversity. But it doesn’t stop there. They want to see companies meaningfully create a culture that welcomes diversity beyond the box that it checks or the headline that it garners. Which brings us to the next point.
Areas for Growth:
Sometimes exclusion is not intentional; it just happens. In order to confront the oversight and tap all the resources and talents that diversity brings to the table, here are some things to keep in mind.
● Take responsibility and take action.
Just as it’s not only the diversity officer’s responsibility to ensure inclusion in an organization, it’s not only up to the chair of the board or the CEO to make sure that women and other underrepresented groups feel welcomed in the boardroom. If you see an unwelcoming behavior, pull the person aside and say something.
● Proactively create an environment where diverse voices can feel confident speaking up and contributing to the conversation.
Increasing the number of women and people of color on your board will make these members feel more comfortable speaking up. Additionally, make sure that one or two people are not dominating the conversations, and if they are, ask for input from others.
● Diverse voices need a place on your board committees as well.
Be purposeful about board committee composition, not just board composition. Having only one woman on the board makes it difficult to ensure there is equal representation elsewhere.
Changing board culture and behaviors to support an environment of belonging and inclusion will allow you to go beyond just checking the diversity box and enable you to reap the real rewards that diversity offers, which include:
● An enhanced understanding of your customer base and environment. As a result, the board can better guide management to find and seize opportunities for innovation.
● Increased quality of board deliberations on complex issues that require expertise and input from diverse backgrounds and talent.
● Avoiding the tendency of “group think” characteristic in more homogenous boards.
● Wider business connections and networks.
● Increased investor confidence and company value.
I don’t want to see talent squandered and companies failing to reach their potential, but I am hopeful. And even though this is not a new topic, the past year has been a game changer for bringing awareness and action to the inequity and underrepresentation that exists around us. Change is happening. Momentum is building—but it’s not enough. We can and must do more.
We all have a part to play in making sure the potential of diversity is realized, especially on our boards. It’s not about avoiding a public backlash or legislative fine. It’s not even about being good for business (which it is). It’s simply and importantly the right thing to do.