Contributed By Cowen Partners
The board recruitment team at Cowen Partners has assembled these strategies to share exclusively with Boardroom Pulse.
The corporate case for diversity, equity, and inclusion (DEI) as well as representation and leadership at the board level is well established.
Board quality is dependent on board diversity. Diversity helps your company’s board avoid ‘groupthink’ and empowers them with diverse ideas and new approaches that help conquer future threats and embrace opportunities.
Overwhelmingly, studies point out that including women and BIPOC perspectives, skills, talents, and innovation enhances financial and non-financial performance. Nevertheless, progress in board diversity has been alarmingly slow.
For example, a recent JP Morgan Board Diversity Report reveals that while studies have shown that a more diverse board can improve business performance, research suggests that CEOs, founders, and investors within the startup ecosystem have not made boardroom diversity a visible priority.
It is also the case that most CEOs and top executives are stuck on how to move from commitment to action. They still struggle to break down the barriers that women face in accessing leadership roles and boards. The questions revolve around setting, meeting, and staying accountable to ambitious board diversity targets.
The fact is that companies looking to advance DEI representation and leadership at the board level need to consider both internal and external barriers and take deliberate action to address the challenges most relevant for their organization.
This article provides insights into action points you may consider to improve gender and BIPOC diversity on your board.
Commitment & Actionable Goals
These days, almost everyone agrees that increasing the percentage of DEI representation in the workforce and on boards is right. But general conviction isn’t sufficient. What is too often missing is a sense of urgency. It is insufficient to merely hold diversity as a distant goal that should naturally come to fruition in time. Instead, it would be best if you established a clear-cut commitment, purpose, and intention to diversity that underpins decision-making.
It is advisable to set a challenging but achievable timescale for attaining board diversity. For example, you can set time-specific targets stating what percentage of the boardroom will be female and by when. This changes the mindset from wishful thinking to concrete goals that require hands on deck to achieve.
The commitment must also be to a sustained and ongoing effort. There are still strains of resistance to changing the status quo, so diversity and inclusion are not a quick fix. Once you identify appropriate steps, you can standardize them to ensure positive approaches continue.
Public accessibility and scrutinization of a company’s policies have been proven to help improve board diversity and inclusion. Publicly disclosing your company’s mission and actions can be an unsettling task. This is because it puts the spotlight on you, opens you up to scrutiny, and adds public pressure to your actions. However, transparency and public scrutiny are excellent methods for boosting momentum towards achieving your business goals. Once it’s clear that people are watching, it becomes harder to shy away from complex tasks or procrastinate.
On another level, transparency around your current board composition can help you identify gaps and be clear-eyed about whether your process is fruitful.
Transparency also involves repositioning your company’s marketing and branding to be more inclusive. For example, you can express gender-diverse company culture through imagery, values, messaging, and policies. Although you must go beyond mere branding to truly reflect and exemplify inclusion, branding is a valuable means for demonstrating your intentions. It can also attract candidates seeking an organization that values inclusion.
Rethink the Board Recruiting Process
Some companies cite the small pool of female or BIPOC executives as a continuing challenge. An excellent place to start with this problem is recognizing the current system’s inherent biases.
For example, directors have historically been overwhelmingly male, White, and without disability. They have also prioritized personal networks and inside recommendations as sources for board candidates. Often, these recommendations are male, White, and without disability.
Overcoming this reality of unequal numbers requires openness to creative solutions. One tactic is to move beyond the standard practice of searching for executives with prior board experience. Because men mostly have that qualification today, that criterion impedes the sourcing of diverse candidates.
Also, your company should consider partnering with new membership or entrepreneurship organizations in diverse communities to identify potential entrants. These entities can also help your company discover new pipelines for finding qualified diverse candidates.
Create & Maintain a Pipeline
Companies must recognize that, apart from having a diverse board, broader inclusion at all company levels is also essential. Therefore, creating and cultivating an active pipeline of diverse candidates is one of the most critical elements of a successful board DEI effort.
Companies can drive board inclusion by preparing their female and BIPOC executives for future board participation. When the candidates are ready to take on their new role, they will already be aligned with the company mission. You can be assured they have received adequate training to hit the ground running.
This preparation can be in the form of placing them in roles with profit-and-loss responsibility, ensuring they have committed mentors and sponsors, and equipping them with the knowledge and skills needed to confront the governance and strategy issues that boards typically face.
Mentorship also allows incumbent leaders to challenge their own unconscious bias regarding board and workplace diversity. Essentially, integrating a diversity pipeline into overall company culture can create a virtuous cycle that speeds progress on board diversity and counteracts cynicism.
Evaluate Your Processes
While it is great to have a committed team, processes provide the necessary structure to guide your team into realizing business aims. Therefore, you must continually review procedures and assess how they align with the broader mission of attaining more inclusion and diversity at the board level.
There are many ways to create evaluation mechanisms that tie into your mission. For instance, you could put in place a framework to assess whether gender inclusion has been maximized or overlooked in any given situation. This framework allows you to cater to context-specific issues. In addition, it keeps you updated about any changing dynamics in your mission.
Another evaluation process could ensure Black and Brown people are always represented during crucial decision-making meetings, and their contributions receive active consideration.
Now more than ever, the public calls on companies to take a stand on social issues. And one of the issues on the front-burner is diversity at the highest levels. To achieve this goal and meet the expectations of an increasingly socially-minded consumer base, your company will need to go beyond aspirational statements and take a proactive, aggressive approach to increase diversity within its ranks.
Diverse boards make better decisions, which ultimately leads to better financial returns and long-term value creation. The board diversity mission starts with a single vision, but you can only realize it through the combined efforts of your entire team.
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