While diversity is a term with many definitions, few would argue that companies and boards are coming to one conclusion: Diversity matters.
NACD has come to the same conclusion and made diversity the focus of this year’s Blue Ribbon Commission, is holding forums across the United States about boardroom diversity and held a panel on the strategic implications of boardroom diversity during the Spring Forum on June 12. During the Spring Forum panel, Beatriz Infante, director, Sonus Networks, Emulex, and founder and CEO of BusinessExcelleration; Tony Jimenez, president and CEO, MicroTech; and John Thompson, vice chairman, global CEO and board practice, Heidrick & Struggles, discussed their experiences and the value of diversity in the boardroom.
Infante noted that social media, another panel discussion during NACD’s Spring Forum, also drives diversity. She explained that in the past, if you had an activist shareholder, he or she would write a letter and that was often the extent of it. Today, that letter can be published on the Internet immediately and be available to all shareholders and the public at large. Infante added that boards with a homogenous composition are creating risk management issues for the company. She suggested that boards need to evolve from a group of people who think alike to a group of people who collaborate and bring in different perspectives. Jimenez was quick to point out that when diversity is lacking on a board that it is generally a sign that the company itself isn’t diversifying its workforce.
Thompson encouraged the audience to put a new twist on an old saying when it comes to boardroom diversity. Instead of following the mantra, “Some things need to be seen to be believed,” he suggested, “Some things need to be believed to be seen.”
To ensure your board is diverse, Jimenez suggested taking a hard look at where your board wants the company to go and ensure you have the people who can get you there. He also said that developing a culture of straight talk on the board is important for open dialogue. You must realize you are addressing concepts, not attacking people, he said.
An audience member asked how boards can include more international directors. Thompson said one of the biggest challenges is getting these directors to meetings. He suggested rotating the locations of board meetings, possibly paring down the number of meetings a board holds or easing meeting attendance requirements to “six of the eight meetings.”
Aside from global directors, another focus was on the significance of younger directors. Infante noted that a board’s needs are situation specific. She noted that if you are a consumer company that sells to younger people, there could be value in having a younger director since they approach information gathering and problem solving in a different manner.
Thompson said that he didn’t believe age was the real issue. He said boards need to look for someone who will bring wisdom to the board regardless of age, and highlighted pattern recognition as a key building block of wisdom.