Are Boards thinking about diversity in the right way?

The case for communications professionals on Boards

The days of monolithic boards are fading fast. Just in the few years that I have been serving on boards, companies have recognized the importance of having different faces around the table, bringing the different backgrounds and experiences of key stakeholders. Diversity has become the new standard.  

But are companies viewing diversity through too narrow a lens, one that focuses almost exclusively on gender and ethnic diversity?  Both are enormously important. Despite recent gains however, women and people of color remain woefully underrepresented in the boardroom. Women hold just 29% of the directorships in the S&P 500, and less than half that among private companies; people of color hold just 10% of the seats at Fortune 500 companies. I believe we need a different approach.

If the goal of diversity is to improve corporate governance by injecting different and valuable points of view into the conversation, then perhaps it’s time to widen that focus to encompass diversity in skill sets that can make a company more relevant.  In doing so we can then source from a much larger talent pool.

One thing that has remained constant when it comes to evaluating a potential board candidate is the expectation that the individual has a financial and business background.  My own experience as a CEO running a global P&L, building a growth strategy and driving a leadership team within a high performing corporate culture were all essential to my ability to adapt to the duties and responsibilities of the boards I’ve joined. But what can be missing from a board like that is the diversity of thought that comes from people of different professional backgrounds. 

Yet, boards operate today in a world undergoing a significant shift from shareholder to stakeholder capitalism, where growth and profits are fundamentally linked to a company’s purpose. As BlackRock chairman and CEO Larry Fink wrote in his 2019 letter to CEOs, “[c]ompanies that fulfill their purpose and responsibilities to stakeholders reap rewards over the long-term. Companies that ignore them stumble and fail.” The Business Roundtable’s  Principles of Corporate Governance acknowledge that companies must meet the needs of all their stakeholders because their “long-term interests are inseparable.” 

One of the most valuable skill sets that boards need to respond to this dramatic shift is corporate communications.

The world in which we live has changed permanently. According to Russell Reynolds 2021 Global Trends in Corporate Governance, will be climate change risk, diversity equity and inclusion, convergence of sustainability reporting standards, human capital management, return of shareholder activism and virtual meetings.  For any brand to be effective in this environment, it needs to hone its brand promise and consistently meet the demands of both internal and external stakeholders.

The ethos of companies and of brands will be scrutinized and judged by consumers and partners, by governments and NGOs, by employees and investors, and by society as a whole. Boards have begun to recognize that in this new world, brand reputation is a corporation’s most valuable asset. How you engage stakeholders is essential to reputation and it can make or break a business. Gone are the days when you could deliver one message to Wall Street and another message to Main Street. Social media will expose that inconsistency in a nanosecond. 

In my experience, no other profession is as uniquely trained in stakeholder engagement as communications. Communications executives understand the link between how a company responds to issues affects its perception among stakeholders and the long-term value of its brand. 

Indeed, if communications had a more significant role on more boards, we might begin to shift corporate thinking from the next quarter to the next quarter century, which is the only way we will solve seemingly intractable problems like climate change, economic inequality, or pandemics.

Open a board to communications pros, and immediately we have an exponentially larger diverse candidate pool, especially of women. Communications is a female-dominated profession; women make up 69 percent of the membership of the PRSA, for example.  And while we as a profession have much work to do to become more ethnically diverse, we have some very prominent black colleagues at the top of our profession.  This dual diversity is hugely important – consider what Fink wrote in his 2021 letter: “A company that does not seek to benefit from the full spectrum of human talent is weaker for it – less likely to hire the best talent, less likely to reflect the needs of its customers and the communities where it operates, and less likely to outperform.”

Every communications professional has worked at the forefront of the societal, business and economic transformation that is defining those needs. Extending our ideas of diversity to include experienced marketing and communications talent can give a company’s leaders a tremendous advantage. It’s a win-win-win for companies, who get more diverse skills in the boardroom, the opportunity for more gender diversity, and a much better chance at preserving brand value.