As the call for companies to further diversify their boards of directors grows, with pressure from firms like Nasdaq, Goldman Sachs and Vanguard, a new report from Ellig Group, a leader in recruiting and onboarding executive talent, and the Society for Human Resource Management (SHRM), which has 300,000+ executive and HR members worldwide, captures insights from top CEOs and board leaders on how companies can begin to change today.
The report, titled Bold Leaders: Nine Actionable Solutions to Reimagining Board Diversity, features 20 accomplished CEOs and board members who identified actionable solutions boards can make to ensure lasting change.
Describing the mounting pressure on boards to diversify as a “movement” rather than a moment, Janice Ellig, CEO, Ellig Group, predicts there will be “more legislative and regulatory action around board diversity”, pointing to Nasdaq's proposal to change its listing standards.
Ellig admits that there has been steady progress at the board level for certain groups like women, although concedes the progress is slow with the number of women on boards having had “less than a 1% average annualised increase over the past 25 years”.
]For other minority groups, however, there is little progress at all, “and this is just one of the many ways in which companies need to address the issue of racial equity in their organisations”.
According to Cindie Jamieson, chair of the board of Tractor Supply Company and a director of Big Lots, Inc. and Darden Restaurants, in order to get to the diverse representation boards want to achieve, it’s about more than intention. “I think it's about courage. If you're in a leadership role on a board, it's really important that you do what you need to do to create these openings when they need to be created.”
With the HR profession committed to helping boards and CEOs achieve these important initiatives, they offer these clear and practical steps.
9 actionable solutions to reimagining board diversity
Nine CEOs and board leaders provide insight into making sustainable changes to boards in order to make them more diverse.
- Diversify the Nominating and Governance committee first
"Once in that role [of being on the Nominating and Governance committee], I would always make sure that the slate for new directors includes women; today I push for 50% of the slate candidates to be women."
Maggie Wilderotter – Chairman and CEO, Grand Reserve Inn; director, Lyft, Inc., HYPE, Costco Wholesale Corporation, DocuSign (Chair), Hewlett Packard Enterprise Company, Tanium Inc., Sana Biotechnology, Sonoma Biotherapeutics
- Increase transparency
“The goal needs to be public – not just within the company – because then we will be held to a standard of our own setting."
Kay Koplovitz – Chairman & Co-founder, Springboard Enterprises; director, ION Media Networks, Veniam
- Demand diverse slates
"If you think about it, there is no other part of our business where we engage advisors and accept five different options when only one truly achieves the objective. Why would search be any different than any other work that we judge based on the outcomes? The stakes and the desired outcome are just as clear." Stephan Tanda – President & CEO, AptarGroup, Inc.; director, AptarGroup, Ingredion Incorporated
- Refresh the board
"Individual directors have an obligation to the board that they look in the mirror on any given day and ask themselves, 'Are you bringing your A game?'"
Les Brun – Chairman and CEO, SARR Group, LLC; Broadridge Financial Solutions (Lead Director), CDK Global Inc. (Chair), Merck & Co. (Lead Director), Corning Inc., Footprint International Holdco, Inc.
- Sponsor/Develop diverse executive talent
"CEOs and board members have incredible influence; sponsorship at that level will open doors for board-ready, C-suite leaders within the company looking for their first board role."
Nicole Sandford – EVP and Board Advisory Leader, Ellig Group.
- Add a seat
"If the leader is committed, if we believe in it and we want to execute, we do it even if it means adding a seat. The talent is out there."
Truett Tate – Chairman of the Board, QBE North America; director, Reference Point (Chair), FIMBA (Chair), Medicus (Chair), The Social Book Club (Chair), Equal Future
- Refuse a board
"Would I join a board that wasn't diverse today? Honestly, if a CEO does not have the spirit of intent to make that change, count me out."
Richard Davis – CEO, Make-A-Wish Foundation; former Executive Chairman, CEO & President, U.S. Bank; director, Dow Inc., Mastercard Incorporated
- Open the aperture
"Intentionality is really critical. For so long, we heard 'we can't find candidates.' It was all about the 'can'ts.' We just decided that diversity matters and found great candidates. In the end, you can't give up."
Pat Russo – Board Chair, Hewlett Packard Enterprise; director, KKR & Co., General Motors, Merck & Co.
- Broaden the network
"As directors, we have to ensure that we do the hard work around identifying strong candidates and not bias ourselves by shortcutting the process and defaulting to those that we already have relationships with." Dawn Zier – former C EO, Nutrisystem; director, The Hain Celestial Group, Spirit Airlines, Prestige Consumer Healthcare