Why does building a diverse board matter?
While many businesses acknowledge that having a diverse workforce is an integral part of their culture, delivering this can often require a more complex process. Habitually, we can be prone to token hiring, or unconscious bias in our decision making – sometimes allowing a closed-minded process of selection. Not only does this negatively impact the process, but it can pose a top-down issue – as diversity is not reflected in the boardroom, or filtering to the lower levels.
Recognising that your board should have varied perspective, and more significantly, diversity of thought, is integral. PwC’s 2018 Annual Corporate Directors Survey highlights that 94 per cent of directors agree diversity brings unique perspectives to the boardroom – a statistic that drives home the importance of building your diverse C-suite. It’s not about adopting new policies to simply ‘comply’, we need to deliver actions that represent a diverse workforce. Whether this comes from utilising the process of talent pipelining or succession planning to futureproof your board – taking control of your hiring needs is important.
The ways in which we can develop a boardroom that is diverse are varied. Ensuring that you manage and maintain an active talent pipeline, which also includes changing your mindset and approach to thinking, learning and development, is key here. Your pool of talent requires the investment of time and active engagement with candidate progression to fill senior positions.
It is no secret that the corporate view from the boardroom is widely regarded as a male consortium. It has been recognised in a recent report from Cranfield University that over the past 12 months the percentage of women on FTSE 100 boards has increased from 29 per cent to 32 per cent, but this still needs to rise. Although gender is not the only focus of boardroom disparities – ethnicity, disability, education, socio-economic status and sexuality are all underrepresented – it is a topic that has seen much discussion and debate.
Significantly, strategic oversight can also be best delivered through a C-suite that holds the fundamental basis of diversity. Boardrooms can focus on creating and applying policies, building internal pathways and boosting communication. This can then have the trickle-down effect to the rest of the corporation. After all, if you want to attract diverse leaders of the future, they will feel more reassured striving for this position when they see somebody with similar attributes to them in a top position.
Here, we should also encourage open conversation about elements of diversity that aren’t visible, such as sexuality and neurodiversity. These can’t be actively seen but promoting a safe space where open conversations can take place and a boardroom that reflects this culture will show the wider business that the representation is there and that it is inclusive.
When we think about why diversity is truly important within the boardroom, the answer is fundamentally quite straight-forward – it makes good business sense and it offers a true and fair representation of the varied and multi-skilled society we live in. This, however, is a common reason to strive for diversity at boardroom level. The lesser known fundamental is that it breeds diversity of thought, allowing for greater innovation and creating an environment whereby people are free to be who they really are. When you spend the majority of your time at work, this is of the utmost importance.
The challenge for business leaders today is to ensure that their hiring processes do not present bias that exclude certain candidates within the talent pool and, equally, to recognise and develop talent from within the business. Encouragement and representation are vital elements to your attraction method – get these right and innovation will flourish within your business.