By Ryan Velez
Several studies and suggestions have come up with the idea that diversity in business is not just a benefit for equality or PR, but for the bottom line as well, with different viewpoints enhancing the business’s chances for success. Things have changed from only a decade ago when the boards of many companies would balk at hiring a woman or minority. While they have more seats at the table than four years ago, The Network Journal says that according to a recent report, change is occurring too little and too slow, especially for what many expect.
The Alliance for Board Diversity, a collaboration of four diversity organizations, reviewed Security and Exchange Commission data submitted as of June 30 from 492 Fortune 500 companies. Women and minorities held 30.8 percent of board seats among those companies in 2016, compared with 25 percent in 2012. At this rate, it would take approximately another decade before this number increases to 40 percent, a figure that many consider to be a missed opportunity. One who feels this way is Ronald C. Parker, chairman of the Alliance for Board Diversity.
“What company do you know (that) would be willing to wait 10 to 15 years to take opportunities for growth?” he said. “They’re not moving fast enough … in changing the composition of their boards.” Factors contributing to this slow movement is a combination of slow turnover on boards as well as an inability to go outside the traditional business circles to tap talent. While the report notes that Fortune 100 companies are doing slightly better overall, they still share the same issue of minimal gains. Deb DeHaas, chief inclusion officer at Deloitte, suggests that companies should begin planning now to help accelerate growth. For example, keep an eye on which board member will retire next, and start priming someone for the role, similar to other C-suite positions. Having someone affiliated with the board to push minority and women hires is also a possibility.
Cid Wilson, president and CEO of the Hispanic Association on Corporate Responsibility, one of the member companies of the Alliance for Board Diversity, notes that a lack of minorities on boards does not only poorly reflect the diverse workforce, but can also misalign with its consumers and lower its chances of tapping into their buying power. “It could have a business impact on you,” he said. “Without a diverse board, you are handicapping your company.”