Friday, 28th April 2017
THE BUSINESS CASE FOR BOARDROOM DIVERSITY
The boardroom is a seat of authority. It is the steering wheel for the whole organisation. It influences the culture and values, provides leadership and drive, and is accountable to its shareholders and other stakeholders. The UK statistics about this composition show that it is by and large white and male, and therefore grossly unrepresentative of the actual mix of UK society, especially in terms of women and ethnic diversity. The latest Davies Report (2011) predicts that it would take 70 years for the Boardroom to have equality for women at the current rate of change! It explains:
‘Inclusive and diverse boards are more likely to be effective boards, better able to understand their customers and stakeholders and to benefit from fresh perspectives, new ideas, vigorous challenge and broad experience. This in turn leads to better decision making.’
A Board sceptic may well ask, why change when performance is good, and the team gets on well and has the right mix of skills? Also, underlying change there is often fear, especially where the change can take the Board to unfamiliar terrain – for example, if in climbing the ladder, one has never been part of a diverse team, how will such diversity gel at the top?
Research also shows that many leaders actually believe sub-consciously, that women and ethnic minorities are less able and motivated than them. The unspoken perception must be that they either lack the skills, or cannot work hard under pressure, or work to set commands and direction. Prejudice is very real, and cannot be denied or avoided. It needs to be addressed directly.
The truth is that there is growing evidence that diversity in a team generates huge benefits. Here are some of the most simple and logical strengths of diversity:
It is critical that leaders understand the power of difference. Research shows that few leaders do, and the conventional thinking is to seek familiarity and similarity in the boardroom. In truth, the lack of diversity in the boardroom in 2011 Britain, especially when we have global companies headquartered here, should be an embarrassment which demands immediate action and pro-activity from any forward-thinking CEO. Also as the population mix of Britain is changing rapidly, Public Boards need to reflect the communities they serve.
Article added on 12th September 2011 at 10:02am
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