Business influencers have been increasingly vocal about board diversity. The debate has primarily focused on: gender, age, and ethnicity. Having a board that reflects and understands the values and perspectives of your organization’s current and future customers is essential to sustaining organizational relevance. Board and executive leaders must promote diversity of perspective when considering who is best qualified to meet the leadership needs of their organization.

Following the European Union’s boardroom gender diversity mandate, California passed Senate Bill 826, requiring public companies based in California to have at least one woman on their boards by the end of 2019. According to Forbes, nearly  40% of new directors on Fortune 100 boards in 2016 were women, but women are still woefully underrepresented on boards. According to executive search firm Stanton Chase, diversity contributes to strategic value, brand perception, and benefits a company’s bottom line making gender diversity “a strategic investment”.

Board member age has been an aspect of diversity rarely considered or challenged in the past. A vast majority of public and private equity backed directors tend to be white males above the age of 50, often the result of a recognition of their time-earned expertise and reputation in their professions. These are important characteristics; however, there is a need to consider the multifaceted nature of expertise that is not solely gained through years of experience.

Organizations must adopt a well-rounded view in considering how to have diverse view points around the table to adapt to the current disruptive and innovative business climate. For example, research conducted by MNI Targeted Media shows that millennials now represent the largest consumer spending group in the United States (accounting for 40% of all spending). Having insights into millennial’s priorities at the board and executive level will provide for a competitive and forward-looking perspective, which is now being recognized by some leaders. According to PwC’s Census of Directors 50 and Under, 90% of directors say that age diversity is important. As technology continues to disrupt at an increasing pace, having younger members may assist the board’s effort to look forward and around the corner of the competitive landscape. Qualified younger members understand innovation and digital transformation and bring an otherwise missing perspective to the decision making process.

Finally, ethnicity and race continue to be an important topic in the discussion about diversity as demographics continue to change globally. The U.S. Census Bureau estimates that by 2050, the country’s population will have grown by approximately 75 million people, and those residents will have a vastly different racial profile than today’s population. The changing demographic trends require that companies change as well, or then risk becoming irrelevant. Through boards around the world, we gain insights into the changing perspectives on diversity.

During a recent assessment interview with a 60+ year old white, male, Fortune 500 director, he shared that his opinion of the importance of diversity has dramatically changed. Whereas he thought it was a political or social issue ten years ago, he and many of his colleagues are witnessing the benefits of diversity represented on the boards they serve today. He noted that he enjoys the meetings more, appreciates the diverse perspectives, and believes the board’s performance is improving. By starting with transformation in the boardroom, leading organizations are dedicating resources to ensuring that they holistically represent their customers, employees, shareholders, and other stakeholders.

What are the benefits of a diverse board? Having a board comprised of diverse gender, age, race and ethnicity:

  • Promotes a more multifaceted discussion of strategy and the competitive landscape.
  • Brings in new and broader perspectives.
  • Optimizes members’ diverse backgrounds, creating new connections for the board. 
  • Maximizes opportunities for advancement – especially in technology and innovations.
  • Minimizes the development of “Group Think.”
  • Promotes a culturally inclusive environment that is attractive on the global stage.
  • It’s the right thing for culture progress (passes the “smell test”).

More on board diversity

In his article, “Reboot, Not Refresh”, published in International Banker, our CEO, Byron Loflin, writes about diversity and optimizing board composition.

Discover how our partner, Stanton Chase, a global specialization leader is the top diversity and inclusion executive search firm.

The challenges facing college and university boards of trustees (also referred to as regents, governors or visitors) today are formidable. They range from cutbacks in federal and state support to faculty governance and presidential leadership. Boards bear responsibility for issues that touch on every aspect of campus life: enrollment, financial aid, academic integrity, fundraising and athletics. At times they will be tested by crises, such as sexual assault or racism.

High-performing boards want to know how well they are serving the institution. They also want to fulfill their proper role, generally defined as hiring and, if needed, firing the president or chancellor, fundraising, strategic planning and fiduciary oversight. Board evaluation often creates an atmosphere of inquiry and dialogue that sets a standard for the rest of the institution to follow.

How can evaluation strengthen board effectiveness? Most obviously, it can uncover strengths, weaknesses and areas for improvement, which in turn can shape priorities for board education. Evaluation can forge a culture where trustees can be more open about board performance and their own satisfaction. And as a result, they develop more confidence in their processes and actions.

Evaluations take many forms. Most evaluations are of boards, not individual members, and can involve any combination of strategies. These include:

  • Hiring a consultant;
  • A self-administered board survey;
  • A board meeting dedicated to evaluation;
  • A retreat;
  • An in-depth written analysis of the evaluation process; and
  • Actionable steps to enact changes and plan for the future.

Some of the best evaluations use a survey that can be evaluated against what is expected of high-performing boards (for example, a trustee satisfaction rating of 8–10). Engaging an independent consultant to guide the process can increase board members’ comfort level with self-scrutiny. A skilled consultant can also explain the survey’s results, define goals and help the board set an action agenda.

A carefully thought-out evaluation process can reinforce that a strong board is on the right track. For a board that is seeking its way, evaluation can help it address issues before they undermine the institution’s effectiveness. It can also set the stage for positive collaboration with the president and the faculty.

As long as an evaluation is viewed as fair and capable of real change—not merely talk—it can inspire boards and trustees to adopt best practices in everything they do.

Ready to dig deeper? Download our Guide to Board of Trustees evaluations.

This article is authored by Kent Chabotar, Ph.D., president emeritus of Guilford College and co-founder of MPK&D Partners. Founded in 2014, MPK&D is an experienced team of higher education leaders, who deliver practical and creative solutions to some of the most complex challenges facing institutions today. For more information, visit www.mpkdpartners.com

The latest pronouncements from Volkswagon’s Chairman Hans Dieter Pötsch, would like to paint his company’s recent wrong doings as a “chain of errors”.  Basically, it was just some buggy code, right?  A few errors that were just missed and then built upon themselves.

There is nothing in this story of corporate misdeeds that truly resembles an error.  This scandal is the result of a very calculated set of decisions motivated by money.  In a recent NPR piece, John Ydstie says that, “VW developers couldn’t figure how to meet U.S. emissions standards within the timeline and budget they’d been given, so they developed the software defeat device.”  Basically, they couldn’t figure out the answer so they cheated.

These kinds of things don’t just randomly happen at a company the size of VW.  This was not just the result of a chain of errors. There is a fundamental cultural problem at VW that will not be fixed until the Board of Directors itself is cleansed and indoctrinated with sound governance and ethical practices.

We use cookies to give you the best online experience. By agreeing you accept the use of cookies in accordance with our cookie policy.

CBE Privacy Settings

When you visit a website, it may store or retrieve information on your browser, mostly in the form of cookies. Control your personal Cookie Services for our website here.

These cookies are necessary for the website to function and cannot be switched off in our systems.

In order to use this website we use the following technically required cookies wordpress_test_cookie wordpress_logged_in_ wordpress_sec

Decline all Services
Accept all Services