Board diversity is a hot topic at the moment: FTSE 350 companies have been asked to announce the percentage of women they plan to have on their boards in 2013 and 2015 by … well, now.
Of course, diversity isn’t simply about male/female: there are many more ways in which people can differ from each other, such as in age, background, education, experience, nationality… there are as many ways of being different as there are people. So the male/female issue is only one thing to think about, but it is probably the easiest place to start.
Lucy P Marcus of Marcus Ventures argues that it is good corporate governance and good business sense to have a diversity of thought and experience on the Board, particularly international diversity. Moreover, she says that:
“diversity is a matter of organisational culture, and to a significant extent this is set by example from the top. A diverse board demonstrates that diversity is a value that the company holds throughout its business”
Diversity matters – crucially, as a way of avoiding the risks of ‘groupthink’ – and as a topic deserves to be brought out of the Careers section, where discussion is often reduced to a bland statement about recruitment policy, and discussed elsewhere on the website. The corporate attitude to diversity is indeed part of the company culture.
If you’re going to make an announcement about Board diversity targets, putting this statement on the corporate website is an easy option, with the (potential) benefit of demonstrating your commitment to diversity from the top down.
Such a statement would, of course, need to be updated with progress against the target each year. Additional diversity targets could be added in future, if needed, and some explanation of how the Board takes diversity into account in their nomination procedures would be interesting too.
Is yours up yet?
See, for example, Barclays who have a statement on Board diversity available from their CR section (note the stamp of authority conveyed by the Chairman’s signature), and RBS who link to theirs from the Board page (note the reference to their Global Women’s Network).
However, see also Balfour Beatty’s interesting response, which is not to target a precise number of women, but to redouble its efforts “to encourage more women to stay within its workforce and progress through the ranks to senior positions.” This is, of course, another important point, and one discussed by the 30% Club, and by the Institute of Directors, which points out that the low female participation on boards is a symptom of the underlying problem of low female presence in senior executive management. (See Big Picture March 11).
There’s a very interesting McKinsey article about how some major companies are dealing with this (Changing Companies Minds about Women – registration required), including Shell, PepsiCo and TimeWarner.
A follow-up question then: how are you managing this problem – do you know what your talent pipeline is, and how are you communicating your efforts on the corporate website? Shell, for example, reveal the percentages of women in supervisory/management/senior leadership roles over the last 10 years in their online annual report, and link to this from their Diversity page on the main corporate website.
This, like discussing your plans for diversity at the very top level of management, is a good way of communicating what the corporate culture really is.
……..
You might be interested in:
- Odgers Berndtson: Thinking Independently Together
- 30% Club: international comparison.
Lucy is Editor at Corporate Eye
