Have you ever wondered who makes the big decisions in companies? Often, it’s the Non-Executive Directors (NEDs). However, a growing issue in these boards is that they are mostly made of a homogenous demographic that doesn’t always reflect the diverse perspectives in the market today.
Whilst these individuals may provide relevant knowledge from their breadth of experience and connections, a team with an overwhelming majority from one demographic does not truly represent today’s society.
This lack of diversity in boardrooms is a concern because it means we’re missing out on different perspectives, experiences, and ideas which are crucial if we want policies and outcomes to be as fair as possible.
I am increasingly asked about recruiting for NEDs but I’ve noticed that it can be quite an opaque process – a lot is done via the existing C-suite networks which directly feeds into the above issue.
Lack of BAME Representation within Commercial Boards
A 2020 report found that 37% of FTSE 100 boards had no BAME representation, and FTSE 250 were even less diverse revealing a shocking 69% of respondents with no ethnic representation in their boardroom.
Statistics like these make it hard to argue with the fact that the traditional recruitment process does not work in favour of higher representation of ethnic minorities. This is commonly due to several factors:
- Unconscious bias
- Deliberately targeted pools
- Rigid role specifications
- Lack of transparency
- Insufficient emphasis on people and values
- Inadequate pipeline of candidates
- Selective reading of CVs
I know numerous people who have so much to offer from their experiences, both culturally and in their work, however, because they don’t mix in the usual NED circles, they won’t ever be considered. I’m sure if you take a moment to reflect, you could pinpoint these people within your own circles too.
Making Boardrooms More Inclusive and Representative
How do we tackle this issue and make boardrooms more inclusive and representative? One approach discussed by Anjli Raval in the Financial Times discusses the idea of using a ‘matchmaker’, which is essentially an individual who helps candidates work their way to their first NED role by facilitating boardroom apprenticeships.
These candidates are connected with a host board for a 12-month stint as observers, where the chair mentors them, as well as being assigned a coach to help them navigate boardroom relationships and decisions.
Such schemes bring benefits for both sides. For candidates, they provide insight into what a seat on a corporate board involves and the experience brings a welcomed addition to their CV.
For businesses, these apprenticeships can be a useful tool for finding and training a more diverse pool of future leaders. It also provides an opportunity for the board to bring in specialists, from a variety of different sectors, to contribute new insights to their team discussions for a short period.
The Power of Diversity
In the bid to make boardrooms more diverse, it’s important to remind ourselves just why this movement is so important. Research shows that more than 70% of modern employees want their organisations to invest in creating inclusive workplaces that align with their values.
Not just this but companies that prioritise DEI are up to 36% more profitable, and culturally inclusive teams are over 35% more productive, making it a win-win for everyone involved.
