What are some of the strategies that boards can employ to improve diversity in the boardroom both with gender, ethnic and other perspectives?
There are six tips that I would offer that I think boards can utilize to increase diversity.
First is what we’ve just been talking about, look beyond sitting and retired CEOs. When a board steps back and says, “As we look forward strategically, what do we really need? What are the skills sets we really need that are going to add value?” Let’s say it might be experience with China or it might be digital expertise, I think the question that they need to ask themselves is, “Do we have a CEO [in mind] to get that experience?” And when you step back and think about where else it might come from I think you’re going to open the opportunities to many more diverse candidates.
Secondly, a lot of boards are starting to think about not just age limits, but term limits and that drives refreshments on boards. So when a board considers term limits, you start to see more turnover and that gives the board more opportunity to bring in diversity.
Thirdly, one of the things that I’ve personally seen that really makes a difference is making diversity a priority from the top board leadership. It could be the CEO, it can be the chairman if she or he is a different person, it could be the chairman of nominating, it could be the lead director. But when someone at the top of the board, someone who is in a leadership position in the board says, “This really matters, we must make it a priority,” I think you see a real change.
Fourth, committing to a diverse slate, making sure that there’s diversity represented in every slate that’s considered important. I think it’s critical to hold your search firm accountable, it’s critical to hold your nominating committee accountable and say, “This really matters and we want to see a diverse slate.”
Fifth is considering new-to-board directors. The more a boards reach outside the universe of people who are already sitting on boards, I think the more opportunities there are to consider diversity.
Sixth, looking holistically and building a board for tomorrow today. So don’t just think about what you need today, but think about what does this board need to look like in five years to support its strategy? That again opens up opportunities to think about different backgrounds and how you’re going to identify people that will matter tomorrow to this board and not just today. And that again opens you up for, I think, more diverse candidates.
