The importance of diverse thinking at board level
Article by Audeliss
When we think about why diversity is truly important within the boardroom, the answer is straight-forward – it makes good business sense. It offers a true and fair representation of the diverse, varied and multi-skilled society we live in. Striving for diversity at board level breeds diversity of thought too, allowing for greater innovation and creating an environment whereby people are free to be who they really are.
By having a diverse set of executives seated at the table, organisations are intentionally ensuring that a wide range of perspectives exist to create the most effective way to oversee a company. PwC’s 2018 Annual Corporate Directors Survey has shown that 94 per cent of directors agreed that diversity brings unique perspectives to the boardroom. Executives must therefore 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.
Critically, strategic oversight is best delivered through a C-suite that holds the fundamental basis of diversity.
Hiring for ‘culture add’ and not ‘culture fit’
Unfortunately, many organisations get caught up in a restrictive culture fit mindset – the idea of hiring carbon copies of their existing employees. What follows is a homogeneous environment that stifles creativity and innovation, ultimately leading to stagnation, stunted growth and an echo chamber of indistinguishable views.
Hiring for culture add, on the other hand, completely shatters this mould. Shifting to a culture add mindset enables employers to focus on what unique skills, experiences and opinions a candidate could bring to the team, rather than how they differ. By foregoing familiarity, organisations open themselves up to a plethora of opportunities to welcome diverse talent into their businesses.
Naturally, employees tend to gravitate towards other professionals who are similar to themselves – and when the time comes, they typically dip into their network to consider which of their contacts might be the perfect fit. For this reason, unconscious bias infiltrates candidate referrals, meaning they tend to come from a culture fit point of view, rather than culture add.
Representing the people that you reflect and serve
It’s simple. Boards should be representative of their employees and the wider society that they serve. It’s unlikely that you have a homogeneous client base, and the more diverse your workforce, the more likely you are to be in tune with understanding clients’ needs, as well as your employees’.
McKinsey’s ‘Diversity Matters’ report, first published in 2015, made it clear that racially diverse companies outperform their competitors by 35 per cent, with gender diverse ones doing so by 15 per cent. A combination of the two would suggest that a truly diverse organization could expect to see a 25 per cent net increase in performance.
As we embark on our professional careers, we rely on role models for inspiration, guidance and reassurance. By observing successful role models, we grow confident in our ability to rise to the top, despite any barriers that may stand in the way. While role models and mentors don’t necessarily have to mirror all the qualities of the mentee, it’s much easier for an employee to draw influence from someone they can directly relate to.
Fundamentally, businesses can become representative of wider society by taking real, concrete actions to accelerate meaningful change. Organisations should nurture their candidate pools, implement talent pipelining and succession planning, as well as lay down the groundwork to provide opportunities for each individual to progress.
Handling new challenges and periods of change
In an era characterised by constant change, the need for diverse input into decision-making is essential and we must not restrict ourselves to the perspective of one demographic. Companies are now facing more complex issues – the call to action on Black Lives Matter, inclusion’s growing importance, dealing with the impacts of the pandemic and remote working – placing a spotlight on diversity initiatives and how employers understand, recognise and handle change.
Introducing a NED can also bring a new perspective, challenging the thoughts of the CEO and other board members, holding them to account and providing the strategic, independent oversight needed to guide and influence key decision-making. As a result, diversity of thought can help your organisation grow, identify risks, spot opportunities and outperform others.
In placing a core focus on change management, and ensuring your executive team have the tool of diversity of thought at disposal, organisations can truly benefit from the experiences and knowledge of the senior team. Boards – and therefore companies – are better advocates for diversity when they themselves are actively advocating for it. Placing an emphasis on narrowing disparities in pay, promotions and the treatment of different lived experiences, backgrounds and cultures will not only begin to remove some of the obstacles faced by underrepresented employees, but to establish a more open, accepting company culture.
The ways that we can develop a diverse boardroom are varied. Ensuring that you manage and maintain your talent pipeline, which also includes changing your mindset, alongside learning and development strategies, is key here. Candidates require the investment of time and active engagement with progression opportunities to fill senior positions.
There are several key action points for organisations to take on board to diversify their board and embrace the insight that this brings:
• Celebrate visible role models across all levels of the organisation.
• Understand the difference between culture add and culture fit and adapt your hiring strategy to welcome candidates that enhance the business’ ambitions.
• Nurture and develop your talent pipeline to provide opportunities for future leaders to take a seat at the boardroom table.
Our boardrooms are evolving. We are moving away from homogeneity, towards what is slowly become a thriving and increasingly diverse and inclusive boardroom table. The past year has provided a number of learnings for senior leadership teams and taking the time to consider how a board ‘thinks’ and ‘works’ is now a crucial element of successful change management.
Audeliss believe diversity of thought is one of the biggest competitive advantages to any leadership team. If you would like to discuss how to make your workplace an inclusive environment or are looking to recruit more diverse talent, then speak to a member of the team, who would be happy to help.
