The Pressing Need for Boardroom Diversity

As racial and political tensions have escalated over the last few years, the need for diversity, equity, and inclusion has become more apparent as stakeholders demand change. Corporate boards play an integral role in leading companies through societal changes and delegating responsibility to chief diversity officers is no longer the baseline – employees and shareholders expect more. The modern board’s role has become twofold: to ensure that the composition of the board itself is diverse, and to make sure the organization, as a whole, promotes diversity, equity, and inclusion.?

Companies must commit to finding board members with greater diversity of background, experience, and thought in order to create holistically diverse and high-functioning boards. It’s often said that “the tone starts at the top” and board members, who are ultimately responsible for directing companies, are positioned to advance the inclusion agenda.

As boards become more diverse, they will be able to advocate more effectively for diversity. As such, boards should focus on recruiting members whose experiences differ from the majority. Corporations must reach outside of their traditional networks to identify candidates who bring diverse perspectives to the boardroom. Black executives aren’t always included in traditional networks and as a result are often not considered for board service opportunities.

The benefits of increasing diversity and inclusion within corporations are endless. Companies stand to recruit and nurture the best talent when they offer a diverse board for employees to look up to and emulate. When boards and boardrooms are diverse, meaningful, productive discussions about challenging societal issues are strengthened by deep insight and a wide variety of perspectives based on the diversity of lived experiences. As cited in the Sixth Edition of the Missing Pieces Report, data shows that the impact of placing women and minorities into the positions of board chair and nominating them for governance chair can pay immediate and future dividends for the promotion of board diversity.

?“Among other benefits, diversity has been linked to greater innovation, better financial outcomes, and increased transparency for companies,” according to the report. Boards cannot view giving opportunities to Black candidates as “taking a risk” or “making a stretch.” Ultimately, boards must make it a priority to cultivate a rich pipeline of Black talent and emphasize the importance of cultivating talent that is board ready.

Deloitte’s Racial Equity Imperative describes how businesses can activate equity within and outside of their own organizations, structured around three primary spheres of influence within the reach of every organization: workforce, marketplace, and society. Encouragingly, a lot of the measures are working; 91% of CEOs said they are investing in their talent life cycle to promote racial equity, proving that those in power understand that investing in DE&I is what will enable continued success for their organization.

However, there is still much more progress to be made. The board has the most power to emphasize the importance of a DE&I agenda at a company. These values must trickle down to the CEO and the C-Suite and those leaders should be held accountable for implementing them across the organization. The importance of a diverse, inclusive board cannot be understated for a company to become resilient and to provide good corporate governance, diverse board members are imperative.