Breaking Down Boardroom Barriers to Diversity

August 24, 2020 LRN Corporation

The murders this year of Breonna Taylor, George Floyd, Ahmaud Arbery, and many other Black people prompted widespread discussions about systemic racism in the U.S.

As such, the coauthors of an earlier study on boards of directors revisited their survey results in a recent Harvard Business Review article to look at why there are so few Black directors, and what can be done about it.

Some of the barriers for Black directors, according to their research:

  • Recruitment. Boards that don’t have any racial or ethnic minorities tend to keep the status quo; according to the authors, these boards only consider 0.2 minority candidates per open vacancy, on average, and fewer total candidates, 2.9. Boards with two or more minority directors consider 1.0 minority candidates and 3.9 candidates per vacancy, on average.
  • Board introductions. Boards often rely heavily on their own trusted social networks to recruit new directors, the study's authors wrote. When people don’t have diverse circles, racial inequities continue, especially considering corporate America mostly is led by white men.
  • Leadership roles. The survey found Black directors joined their first board earlier than white directors, were more likely to hold an advanced degree, and averaged the same number of board roles and hours of board service as white directors. That said, Black directors were less likely to hold leadership roles–25% were board chairs or lead directors, compared to 37% of white respondents.
  • Dynamics. Most directors gave good marks to their boards’ dynamics–having their voice heard, feeling in sync with other members, performing as a team–with one glaring exception: when a Black director was the only minority on the team.

What can boards do to promote diversity? White men can play a prominent role, as they have more freedom to diverge from the status quo without facing the potential negative repercussions minorities often deal with when moving the diversity button, the authors wrote.

They point to three actionable steps that boards can take to enact changes in their own organizations.

First, boards should assess their director recruitment procedures. As discussed above, many of the current procedures for board recruitment curtail diversity.

The authors suggest boards, especially all-white ones, ask themselves the following questions: To what extent do directors rely on personal connections to identify candidates? What’s the demographic composition of directors’ professional and social networks? What factors are used to rule candidates out? Is a desire for “cultural fit” within the board resulting in a racially-homogeneous board? Is former CEO/CFO experience a necessary prerequisite? Is the board setting new directors up for success?

Second, boards need to focus on accountability throughout the organization’s hierarchy. Directors need to play a strong role in promoting diversity at all levels by ensuring diverse candidates are considered for C-suite roles, holding management accountable for diversity in the talent pipeline, and linking executive compensation to diversity targets.

Third, board members should participate in formal mentoring and sponsorship. These activities can provide valuable connections for minorities that are underrepresented on the board.

Peggy Alford, executive vice president of global sales at PayPal, and a director at Facebook, told Black Enterprise directors can pay it forward when they receive professional opportunities and offers they themselves can’t accept by recommending qualified candidates from a diverse background.

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