My call to action: Make board diversity a priority
Eleven years ago, I was attending the Inc. 5000 Conference on the invitation of a client who had been named Inc.’s Entrepreneur of Year. One morning before meeting her for breakfast, I checked my emails and one from a board member of a Fortune 50 company asking if I had interest in interviewing for a director role caught my attention. This Black director was aging out, and he had identified me as a potential addition. They were specifically interested in adding a female independent director. I immediately wrote back that I was interested in learning more.
The board had nine members: the one Black male who became my sponsor, one non-Hispanic white female, six non-Hispanic white men, and one Hispanic man.
I was quite excited. I had interviewed for a smaller public board a few years earlier, but they ended up adding the chief financial officer of a large public company, instead. I pored over literature of this Fortune 50 company to wrap my head around its challenges and opportunities. Given the China market was of critical importance to them, I assumed my heritage and understanding of that market were the main reasons I advanced to the final round of interviews.
While they ended up not making an addition in that cycle, I nonetheless was grateful for the opportunity to learn from the experience. I asked my sponsor for feedback and how I made it to the finalist stage. My sponsor said my ethnicity was not at all the reason why. Instead, it was my diversity of entrepreneurial experiences, having served on the leadership teams of five emerging-growth technology companies. The new ways of thinking I would bring to the boardroom table is what drove their keen interest.
Fifteen years ago, when I took UNC’s Director Diversity Initiative’s coursework, I was struck by compelling data that showed companies that had women on their boards had better financial performance. Since then, McKinsey has shown that management teams and boards that have gender and ethnic diversity have better performance.
The business case for board diversity is no longer forward-thinking, it is an essential. Institutional investors are interested in ESG, and they are tracking diversity metrics and making their investment choices accordingly.
White women have made the most advancement in replacing some of the seats of white men. Diverse men and women have much progress to make. Data show overboarding or recycling of the same diverse directors, so strive to reach outside your immediate networks. Prioritize and track diversity. What gets measured gets done.
Do not require CEO or CFO experience. Seek younger candidates who are in tune with the latest in technology and offer a different perspective. I thought I was too young when asked at age 44 to interview for a F50 board seat. If chosen, I would have been part of 6 percent of F500 companies with directors aged 50 or under. Sixty-two percent of these increased their board size to accommodate them. These boards did not wait for traditional succession-planning tools to play out, such as a director leaving the board due to retirement or term limits. Increase the board size to bring younger (or other diverse) directors with different experiences on sooner. This indicates a real desire for the value those individuals would bring to the boardroom.
How does the board of the F50 company that reached out to me over a decade ago look today? They increased the number of directors to 14: four white women, two of whom are Hispanic, two Black men, and eight white men.
Progress is being made.
I challenge you to contribute!