I remember how ecstatic I was to receive my first invitation to join a corporate board of directors. It came from a female founder with whom I had cultivated a relationship for over 15 years. I felt fortunate to be asked, but simultaneously overwhelmed by fear that I was in over my head. I quickly learned that my tenure as a generalist, my mid-career perspective, and my subject matter expertise in online communities and Environmental Social Governance (ESG) really lent itself to thinking outside the box for this enterprise software startup.
I credit this female founder for thinking about how to add board members with multiple dimensions of diversity. My gender, age, and nuanced competencies accomplished the following: 1) tipped the scales to 50 percent female board of director representation, 2) reduced the median age of directors, and 3) added new competencies to the boardroom.
However, the word diversity is often interpreted or defined according to our own worldviews. For corporate boardrooms, that often looks like diversity of gender. In response to stakeholders asking for more diverse boards, open seats are given to white women. These accomplished executives have paved the way in corporate America and deserve to be in the boardroom. However, being in close proximity to corporate leadership, still compromising of mainly cisgender white men, gives cisgender white women outsized access to the boardroom over other qualified candidates.
The nature of board work can be very insular, with privacy and secrecy required to make sure that the company is competitive. This creates a high barrier to entry for those who are not already on boards or who lack recommendations from existing board members. “Board directors' networks are typically so homogeneous that they don't tend to yield diverse candidates,” says Kamau Coar, co-leader of the Diversity, Equity & Inclusion Strategic Services industry group for law firm Nixon Peabody.
By using an expanded definition of diversity, we aim to make the boardroom more representative of our society and our culture. This should include, but is not limited to, BIPOC professionals, LGBTQIA+ colleagues, Veterans, persons with disabilities and/or neurodivergent, and representation across industries and ages. A few stats showcasing the disparities in board representation include:
- GENDER: Women currently comprise only 29 percent of corporate board seats -Wall Street Journal
- ETHNICITY: Companies with at least one racially/ethnically diverse director increased slightly from 32 percent in 2020 to 35 percent in 2022 -Harvard Law
- AGE: At Russell 1000 companies, the average age of board members was 61.8 years in 2002 -Bloomberg
Companies and their investors must challenge the status quo to operate and stay competitive in an ever-changing consumer market and complex world. The areas that are most vital to a company's growth and success are emerging as we speak.
“ESG and sustainability are becoming central to boardrooms across the globe, and the existing knowledge gap highlights the necessity for continuous education,” Helle Bank Jorgensen, Chief Executive Officer of Competent Boards.
Data suggests there are positive changes emerging. According to a Component Boards study, traditional competencies like financial acumen and C-suite legacy experience are making way for ESG and digital and technological proficiency. The study also identified traits transitioning into the corporate boardroom including: strategic thinking, adaptability, global geopolitical acumen, and generalist skills. This is all the more reason that we need to expand the definition and profile of what a board member looks like.
Investors and companies need to be intentional about their metrics for board selection. Corporate boards should reflect their customer base and the broader society in which they operate. Anyone who is currently a board member can become an advocate to increase access and create an environment of inclusion for new individuals not yet represented to be invited and have a voice around the board table.
About the Author:
Kari Hayden Pendoley is the Founder of Impact Savvy a strategy firm bringing profit and purpose together for its ESG and DEIB clients. Kari has worked with Fortune 5 companies, private equity firms, Nobel Laureates, Forbes Top 10 Self-Made Women, celebrated social entrepreneurs, and government agencies. Kari is a National Diversity Council certified practitioner, a corporate Board member, and a thought leader writing for industry blogs and speaking at events.