Governance leaders identify ways to increase board diversity
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
How innovation is transforming government
According to Washington Technology’s Top 100 list, Leidos is the largest IT provider to the government. But as Lieutenant General William J. Bender explains, “that barely scratches the surface” of the company’s portfolio and drive for innovation.
Bender, who spent three and a half decades in the military, including a stint as the U.S. Air Force’s Chief Information Officer (CIO), has seen action in the field and in technology during that time, and it runs in the family. Bender’s son is an F-16 instructor pilot. So it stands to reason Bender Senior intends to ensure a thriving technological base for the U.S. Air Force. “What we’re really doing here is transforming the federal government from the industrial age into the information age and doing it hand-in-hand with industry,” he says.
The significant changes that have taken place in the wider technology world are precisely the capabilities Leidos is trying to pilot the U.S. Air Force through. It boils down to developing cyberspace as a new domain of battle, globally connected and constantly challenged by the threat of cybersecurity attacks.
“We recognize the importance of the U.S. Air Force’s missions,” says Bender, “and making sure they achieve those missions. We sit side-by-side with the air combat command, intelligence surveillance, and reconnaissance infrastructure across the Air Force. There are multiple large programs where the Air Force is partnering with Leidos to ensure their mission is successfully accomplished 24/7/365. In this company, we’re all in on making sure there’s no drop in capability.”
That partnership relies on a shared understanding of delivering successful national security outcomes, really understanding the mission at hand, and Leidos’ long-standing relationship of over 50 years with the federal government.
To look at where technology is going, Bender thinks it is important to look back at the last 10 to 15 years. “What we’ve seen is a complete shift in how technology gets developed,” he says. “It used to be that the government invested aggressively in research and development, and some of those technologies, once they were launched in a military context, would find their way into the commercial space. That has shifted almost a hundred percent now, where the bulk of the research and development dollars and the development of tech-explicit technologies takes place in the commercial sector.”
“There’s a long-standing desire to adopt commercial technology into defense applications, but it’s had a hard time crossing the ‘valley of death’ [government slang for commercial technologies and partnerships that fail to effectively transition into government missions]. Increasingly we’re able to do that. We need to look at open architectures and open systems for a true plug-and-play capability. Instead of buying it now and trying to guess what it’s going to be used for 12 years from now, it should be evolving iteratively.”