“We are pleased, but not satisfied.”
On November 12, 2020 Women on Boards held their annual Global Conversation on Board Diversity, an event followed by 30 regional conversations. Speakers provided insight into the importance of diversity in the boardroom, as well as the vast potential for boardrooms across the globe to become more diverse. The organization also announced its new focus for corporate governance: 50/50 Women on Boards, with the goal that women gain 50% of all board seats in the US. Some key takeaways from the conversation included the value of data in promoting diversity and the role that diversity plays in including shareholders in decision-making.
Despite the progress that has been made towards board diversity, corporate boards in the United States remain largely homogeneous. Women make up half the population, yet only make up a quarter of U.S. directorships. Meanwhile, Black and African American directors only comprise 4.1% of Russell 3000 board seats in the U.S., 72% of Fortune 1000 companies have no Asian directors, and Hispanic and Latino directors only make up 2.28% of S&P 1500 board seats. Metrics like these are important because they illuminate some of the areas in which board representation most needs to change in order to reflect the diversity of professional talent in the U.S.
Co-CEO of Ariel Investments, Mellody Hobson, described the importance of considering shareholders in decisions. In her boardroom, she leaves two empty chairs at the table—one for shareholders and one for partners—and conducts discussions and decision-making as if they are there, because these are the groups for whom boards should be making a difference.
In the same vein, Jessie Woolley-Wilson addressed the responsibilities of board directors at the WOB Seattle Conference, saying that a director should think about what they can do for the organizations they are a part of, rather than the other way around. That responsibility is one of the reasons that diversity in the boardroom is so crucial. Diverse board members widen the pool of experiences and perspectives, enabling the board to better relate to its shareholders. Him For Her founder Jocelyn Mangan put it well at the WOB Seattle Conference when she said “Operating a board without diversity is like wearing blinders.”
Bank of America CEO Brian Moynihan stressed the importance of looking beyond titles when it comes to diversifying the board. Melinda Gates also highlighted the importance of changing the traditional pipeline and looking beyond the CEO. Appointing chief executives is popular, but it greatly restricts the pool of candidates, and companies often find that board directors from other roles bring invaluable knowledge and experience to their boards.
The conversation around board diversity is ongoing. This year’s 2020 Women on Boards event highlighted all of the progress that has been made, while also underscoring all of the work that remains to be done.
2020 WOB 2020 Report: https://2020wob.com/wp-content/uploads/2020/10/2020-GDI-FINAL.pdf