Corporate Board Diversity — A Business Imperative
Corporate Diversity is a critical component of corporate social responsibility and affects all parts of a business; whether a new marketing plan to have a greater share of a specific minority segment of the community or a talent acquisition strategy that seeks to increase the number of women and minorities within the managerial level. In the age of the internet, where savvy consumers are able to research and share minute details about their preferred brands, it is imperative that companies assess their talent, marketing, philanthropy efforts and board composition to ensure that they are mirroring the communities they serve. Regardless of the industry, the buying power of women and minorities is significant enough to help or hurt the profits of any corporation. Today women represent more than 50% of the total population in the United States and control $4.3 trillion of U.S. consumer spending according to the U.S. Women’s Chamber of Commerce while the Selig Center for Economic Growth reports that minorities combined represent 35% of the total population and have impressive levels of purchasing power (African Americans at $910 billion, Latinos at $978 billion and Asians at $509 billion). As a critical business imperative, corporate diversity has yet to fully impact corporate boards in spite of the fact that a variety of studies have concluded that there is value to shareholders and companies in diversifying their boards. A study by the Alliance for Board Diversity concludes that in the period between 2004 and 2010, white males increased their presence in the boardroom while the presence of women and minorities decreased. The report found that in Fortune 100 companies, 72.9% of board members is white males while 27.1% of board seats are held by women and minorities. Because of the influence of corporate boards on business strategy, sustainability and corporate culture, diversity in the boardroom has become a valuable business imperative. Boards, however, struggle with the issues that diversity poses such as finding qualified candidates, overcoming “in-group” bias and the issue of tokenism which could marginalize female or minority directors. A pipeline of qualified candidates can be established by searching beyond traditional channels and reaching out to organizations such as the members of the Alliance for Board Diversity—-Catalyst, The Executive Leadership Council, and the Hispanic Association on Corporate Responsibility–who serve as referral sources for women, African-American, and Hispanic corporate executives qualified to serve as directors. Establishing formal mentoring programs and broadening the search criteria to include senior level executives and not just candidates at the CEO level are other ways to increase the pipeline. In-group bias and tokenism may be addressed in both the way candidates are chosen and the way the existing board and new director relate. Assessing the personality of the potential director is critical; someone who may not understand a particular business but is consistently engaging in critical thinking and questioning may give the board an opportunity to self-reflect. Furthermore, the chairperson of the board should take a leadership role in helping the new director better connect with the existing board members and helping maintain a constructive and civil environment where differing views may be not only discussed but encouraged. Boards must begin by recognizing the current make up of their directors and establishing parameters and guidelines to attain a group that mirrors the world in which they live and work. The National Diversity Council (NDC) understands that increasing diversity within corporate culture is a complex effort. The National Diversity Council provides support and strategic direction for companies to formulate and implement successful diversity initiatives through consulting, training and program design. The NDC is the first non-profit organization to bring together the private, public and non-profit sectors to discuss the many dimensions and benefits of a multicultural environment. The National Diversity Council is a forerunner of community-based, national organizations that champion diversity and inclusion across the country. It is currently made up of state and regional councils, the National Women’s Council and the Council for Corporate Responsibility. By Yahnia T. Rodriguez, Bluegreen Corporation, and Member of the South Florida Diversity Council
