Diversity & Inclusion
Power of parity in boards: past, present and future
By Andrea Plotnick
Analyzing three key steps boards can take to leverage the power of diversity
By Andrea Plotnick
Psychologist Irving Janis identified the phenomenon of “groupthink” over 40 years ago, coining the nomenclature to describe conformity of thinking.
He concluded that when groups are not diverse, poor-quality decisions are often reached because of insufficient critical reasoning or evaluation of consequences, pressure to agree and a lack of consideration of diverse perspectives.
While it has been over 30 years since research began in earnest around the link between diversity and better business outcomes, most recently including innovation, agility, and financial performance, the pace of change on boards has been glacially slow.
With the intent of propelling more forward momentum on diversity, the Canadian Business Corporations Act (CBCA) was updated in 2020, requiring all publicly traded organizations governed by the CBCA to disclose their diversity and inclusions efforts, targeted level of representation of diverse groups, and if no target has been adopted for a particular group, an explanation of why not. The impact has not yet been felt.
The reasoning behind the lack of better gender diversity at the board level has typically been based on three key and interrelated myths:
Myth #1: CEO experience as a prerequisite
With a dearth of women in CEO roles, the pool is minuscule — creating a problematic endless loop. While it is essential to have at least some CEO experience at the board table, it is by no means critical nor desirable to have a board comprised solely of past or currently serving CEOs.
Rather, by embracing skills matrices tied to their organization’s strategy, boards can ensure a “fit for purpose” board, with coverage of all capabilities critical to effective risk oversight, which might include cyberrisk, AI, or a host of other coveted capabilities.
Myth #2: The lack of qualified women
Broadening the scope of desired board skills through skills matrices increases the pool of qualified female board candidates.
To make it even easier, there are multiple, curated lists of women with the requisite skills and relevant designations.
Using search firms and requiring their inclusion of qualified female short list candidates protects against directors tapping into their own legacy networks and perpetuating the status quo.
Myth #3: Women need fixing
There is no inherent deficit in women that needs to be fixed, but rather the need to combat headwinds in joining boards. Women would benefit from a deliberate focus on creating pathways and networks — something that has been built up historically for men.
A recent LinkedIn poll found that 30 per cent of women do not believe they have the right support or enough time to serve on boards. Another 29 per cent did not even consider it an option.
LHH is taking concrete steps to address these issues in three key ways. Its “Elevating Women in Leadership” development program is focused on accelerating the movement of women into executive roles and exposing them to board work earlier in their careers.
The company’s “Inclusive Leadership” assessments and workshops look at the culture of organizations and boards to ensure they are truly enabling diversity of perspectives.
And LHH’s “Getting Board Ready Program” — offered in collaboration with “Women Get on Board” — helps build a pathway, create a network and lay out a road map with supporting tools to empower women land a corporate board seat.
Better board diversity is not the end goal
Getting women to the board table with the intent of simply checking the diversity box is not the end goal. Reaping the benefits of diversity demands a culture of inclusion, where diverse perspectives are sought.
Here are three key steps boards can take to leverage the power of diversity:
- Create a critical mass: Introducing one diverse individual will often result in that individual conforming to the dominant culture — the exact reverse of the organizational intention.
- Think about how diverse perspectives are mined: What efforts does the chair undertake to ensure that all perspectives are heard? How are diverse perspectives normalized? How much debate is leveraged and encouraged? Are decisions deliberately considered through multiple lenses? Are biases surfaced?
- Consider an objective “Inclusive Board” assessment: Research indicates a disconnect between how inclusive we think we are, versus what others experience of us.
Increasing board diversity is not just the right approach, it is the smart approach.
We must pick up the pace in identifying embedded and unconscious biases and unleash the power that diversity enables. Only then will Corporate Canada realize the power and potential of inclusive governance.
Andrea Plotnick is the Senior Vice President of LHH’s Board and Executive Solutions in Toronto. She works with leaders, top teams, and boards to reveal and unleash their full potential. You can reach her at Andrea.Plotnick@lhh.com.