Recently the FT published the headline “Women take half of new UK boards seats”.
While eye catching, this statistic reflects a necessity. Most companies have set targets for Board level gender diversity of 30% or higher and until quite recently many companies were below this mark. Greater gender balance could only be achieved if for a time a significant portion of new Board appointments were female. The FT didn’t publish in its article that the FTSE 100 currently stands at 36.2% female Board Members and the FTSE 250 at 34.3.%. Good progress but not the end of the journey.
Indeed there is clear recognition in UK Boardrooms and internationally that diversity and inclusion is important for a number of reasons: risk awareness; enhanced decision-making; access to capital. Vivian Hunt, Senior Partner at McKinsey, articulates powerfully how a diverse Board can better understand and meet the expectations of stakeholders.
Gender diversity too often stalls at Executive level. As such Germany has just passed legislation to tackle the shortage of women sitting on Management Boards. And other important aspects of diversity, such as ethnicity, sexual orientation, socio-economic background, are proving more elusive than gender diversity. Black Lives Matter and #MeToo have raised expectations but there is still a way to go.
And too often the challenge is framed in terms of supply, for example not enough good women or too few people from ethnic minorities with the requisite experience. Companies are too often told by advisors, and perhaps too readily accept, that the only solution is to compromise on the key criteria for the role.
At Fidelio we dispute this strongly.
Chairs who are committed to building diverse Boards which then in turn enable diversity and inclusion throughout the organisation can do so in confidence. There is no need for compromise. Quite the contrary. The starting point for a successful appointment – at either Board or Executive level – is clarity about what the role needs to deliver. Once key deliverables are established the pool of talent opens up: an Audit Committee Chair comfortable with scale and complexity may well have served on the Board of a multinational subsidiary or a leading global charity. A Director who can boost technology and innovation may well be found in a CTO role or as a VC partner investing in technology.
Diversity requires us to reframe the debate – not to compromise.
Chairs rapidly see the benefits of being able to access very diverse pools of talent in the home market and internationally and newly appointed Board Members from different backgrounds can reinforce that process through their own networks, experience and perspectives.
Moreover the Board is a composite and so the Chair can balance Board Members with several years' solid experience on a FTSE or DAX Board with the fresh thinking of a Board Member from a very different background but with highly relevant insight and track record. Indeed, the risks of group think are well rehearsed and a Board with very similar corporate experience is far from immune.
The Board in turn has a tremendous role to play in supporting diversity and inclusion throughout the organisation: by setting effective targets; by providing role models; by calling out myopia.
Framing diversity as an opportunity rather than an unwelcome compromise provides access to a wider and extremely relevant talent pool. Willingness to bring fresh thinking to the challenge yields results. Fidelio’s search track record evidences this: 50% of placements in the last 3 years have been female & 30% ethnically diverse.
To learn more about building a diverse Board and leadership team, please contact Mark Cumberlege at mcumberlege@fideliopartners.com.
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