Did King’s Dream include diversity in the boardroom?
Today marks the 50th anniversary of Martin Luther King Jr.’s I Have a Dream speech, one of the most significant and impactful speeches in American history. There is no question that in 50 years, tremendous progress has been made, and yet not nearly enough.
But has this dream come true in the boardroom? Not quite, as a summary of some of the research shows in this article by Nonprofit Quarterly. Minority (including women) participating on boards represent 35 percent of board roles, up from 30 percent since 2010. Given the inherent drag on this metric (more on that later), I actually think this result isn’t bad in 3 years in terms of rate of progress.
Why does this matter?
I think it’s less about economic opportunity, as the financial benefit of being on the board is a bit overstated, relative to the amount of work most board members do and their opportunity cost of other activities. But I think there are two real impacts of this gap. First is inspiration. To see people achieve this level of stature can inspire many more to pursue excellence in their own careers, whether or not that leads to a board position.
Second is the impact on the board itself. I believe an essential element of a board is diversity of thought. If I have 8 people who all share the same perspective on everything, then why not just have a 2 person board. The purpose of a board is to get different perspectives, experiences, skills, and opinions, and then work through that to provide either useful advice to management or good decisions by the board. To be fair, diversity of race and gender does not automatically translate into diversity of thought. But I believe, as do many others, that there is enough correlation and causation that it is a goal worth pursuing for the benefit of the boardroom.
How should we measure this?
I mentioned above that there is an inherent drag on this outcome. While we should continue to measure and care about the final metric, its not the most responsive metric to progress. One of the reasons in this case is that there is not that much turnover in board positions. That’s how it should be. While we don’t want to protect boards, this is an area where stability is good for the long-term success of a company. Because there are not that many new openings of boards, we don’t know if the progress was that 80% of board positions were filled with minority candidates, but there just weren’t that many openings. Although we do know anecdotally that except for CEOs of highly visibly companies, many white males are currently finding it harder to find board roles. The point is that a better metric would be what percentage of new board members were filled by minority candidates. This should even be parsed further, as while female candidates have increased their exposure to boards, African-American has actually decreased by 0.2 percent.
In addition, we should really consider the process inputs to create the result we want. For example, in many sports, while there is not a quota on how many head coaches have to be minority candidates, there is an expectation of interviewing minority candidates. For a while, there were a few candidates passed around and passed on over and over, ending up as the “second choice” conveniently often. But the biggest excuse for lack of more minority board members is a lack of qualified candidates. Once you actually start interviewing candidates, you realize that it just isn’t true.
How do we solve this problem?
In a word, transparency.
Make the process and the decision more transparent. My ideal state for the process is that companies interview and select more candidates than they have openings for. While I don’t like quotas for board composition, I see less trouble with quotas for board candidate composition. Then, since boards primarily represent shareholder interests, let shareholders vote on board members. Member-based non-profits do it. While the current board or management may have their favorite candidate, there should be no problem finding three qualified candidates for each opening. This not only makes the process more transparent, it makes the decision itself more inclusive. If someone truly is a “we need that person” candidate, we should be trusting what are generally a fairly sophisticated group of shareholders to reach the same conclusion.
While I’m hopeful we’ll eventually get there, I don’t think it will be anytime soon, for the simple fact that you have to get a bunch of people who own the decision to give up that control. That kind of change never happens quickly.
As a step of progress, could companies indicate who they interviewed and while they wouldn’t share why the didn’t select the other candidates, at least indicate why they selected their final candidate. There is a downside for highly talented candidates that don’t get selected. Imagine having to post every job you applied for and did NOT get on your resume. It would make you think twice before even accepting an interview. But if this is done across the board, people would adapt and understand its just part of the process.
We certainly have not fulfilled King’s Dream. Good intentions are not enough. You need to back that up with meaningful changes to how we work.
Watch Dr. Martin Luther King Jr.: