The number of women and minorities on corporate boards has remained static in the last 10 years, despite an increasing amount of data supporting the argument that board diversity is related to good business outcomes.
“Businesses have a significant opportunity to improve performance through increasing the diversity – in many forms – of their board,” said Hillary Sale, JD, corporate governance expert and professor of law and management at Washington University in St. Louis.
“There are many great board member candidates out there,” she said. “These people have to come forward, build their networks and make themselves known. At the same time, companies have to broaden their board search networks and insist that search firms, when in use, develop a diverse candidate pool.”
Sale holds a leadership role with DirectWomen, a national program designed to develop and position an elite group of exceptional senior women lawyers for service as directors of major U.S. Corporations. Her thoughts on increasing board diversity follow.
Candidates: Build your network
Sale notes that most people get on a board of directors through an informal “buddy” network.
“Networks influence jobs and careers across contexts,” she said. “Corporate boards are no different. People interested in being on a corporate board need to thoughtfully build their connections to people who influence and shape corporate boards, like CEOs, directors, and other members of corporate leadership.
“Mentoring programs and organizations like DirectWomen can connect talented and qualified candidates with people in a position to influence board searches.”
Companies: Expand and look beyond your network
“When companies make an effort to build the diversity of their board, corporate leadership is generally surprised by the depth and quality of candidates available that are out of their typical networks,” Sale says. “There is lots of evidence to support the argument that diverse teams produce better outcomes.”
“Impressive candidates are out there, but they may not be part of your immediate group of friends and colleagues,” she said. Expanding the network of people corporate leadership looks to for candidate recommendations is essential, Sale said.
The need for corporate board diversity has been addressed in countries such as France and Norway by instituting quotas. “There is no doubt that quotas work,” Sale said. “Quotas are also contrary to American business notions and legally tricky in the United States.”
U.S. companies can, however, take inspiration from the quotas.
“One of the outcomes of the changes overseas is that many international corporations have expanded their networks and director pools have broadened,” Sale said.
Board directorship and diversity were key topics at the recent ‘Becoming an Effective Public Company Director’ at Washington University School of Law. The panel, moderated by Sale, featured CEOs and directors of public companies (video available).