By Dr. Apollo Emeka
The consequences of the status quo have never been clearer. Decades of pollution created a climate disaster. Political power struggles are eroding trust between individuals and leading to war between countries. Multiple diseases present public health challenges. Increasingly frequent financial disasters have caused some to question the viability of capitalism itself. Status quo thinking got us here. Only innovative, critical and diverse thinking will get us out.
There’s no easy fix to the problems we face but there are a couple of big levers we can pull that will shift things in a positive direction. Where can we find these levers, you ask?
So much of the human experience is shaped by big companies and big companies are shaped by their board of directors. A change at the board level will change companies and the companies will impact societal outcomes. Change is never easy, but it’s nearly impossible when the people responsible for enacting the change don’t see any reason to. This article is for you if you’re being asked (or compelled) to change, or if you’re the one trying to compel folks.
Why are Corporate Boards so Important?
Corporate boards influence company strategy and determine both institutional and individual relationships in and out of the company. Corporate boards choose the C-suite: the people who control the most powerful, non-governmental organizations on earth. Boards composed of people who all have the same priorities, values and blind spots (which has historically been the case in America) are limited in their ability to affect change.
There have been efforts in recent years to increase board diversity. Motivations for this push range from economic self-interest (some studies show that diverse groups make better decisions) to social justice (shouldn’t the powerful institutions of America reflect its multicultural population?). However, meaningful changes to board makeup have not yet been achieved. Not even close. Instead, according to a 2022 New York Times article, “directors from underrepresented groups occupy 17 percent of board seats, up from 14 percent in 2020.” Not only is a 3 percent increase insignificant, it is telling that someone would think to combine all non-white males into a single group and consider it meaningful. This tells me perspectives on what representation looks like need to change.
There are concrete steps we can take to make meaningful changes to board diversity. Here are a few to keep in mind.
“Critical Mass” is Critical
In order for us to realize the moral, cultural and economic benefits of diversity, equity and inclusion, we need to reach a critical mass of distinct perspectives within the boardroom. Including one person with a diverse identity is unlikely to turn the tide of status quo thinking. No one woman can speak for all women. No one Black person can speak for all Black people (besides maybe Beyoncé?). Expecting someone to be the sole representative of the identities they embody is unfair. Expecting them to bring the perspectives of all the “other” identities is outright irresponsible.
Ongoing research has suggested that a minimum percentage of representation is required in any group in order for minority voices to be heard. While research is ongoing, an excellent article by Konrad et al. titled “The Impact of Three or More Women on Corporate Boards,” published in Organizational Dynamics, Vol. 37, 2008, puts critical mass in the boardroom at 30 percent. If there is minority representation below 30 percent, outcomes are generally indistinguishable from those of a homogeneous group. A board with 10 seats, needs a minimum of two or three people from every identity group (e.g., Black, Chinese, gay, woman, Rural, Brazilian, etc.) you want to have representative influence. That means our diversity target should not be 20-30 percent total, but 20-30 percent times the number of groups that we care about including. With typical sizes between 4 and 12 directors, it may not be possible to represent all groups meaningfully on every board. But we can strive for representation that aligns with the priorities of each corporation. For example, a large, national company might be best served by a board that reflects the diversity of the American population. Whereas a company with a more specific niche would do well to include representation from their specific customer (or supplier) base.
Here’s how to get to that 20 to 30%
First, seek out innovators. Grab people after their first press release, not because they have been in the industry for decades. Populating a board with people who all come from the same backgrounds, career paths, educational pedigree and lists of “diverse board” members does not meet the bar of true diversity.
Second, elevate and protect dissenting voices starting now. At the beginning of my 6-year stint in the FBI, we learned about the intelligence failures of 9/11 and the U.S. invasion of Iraq. The FBI wanted to understand why and how the intelligence community failed so we wouldn’t repeat past mistakes. We were taught to seek divergent thinking by presenting our assessments to non-subject matter experts. These outside perspectives always forced me to think about my own assessments in a different, more rigorous light. We made a habit of process in the FBI. In the context of a board that’s growing more diverse, including systems that explicitly elevate the voices of diverse members would combat some of the cultural biases that have, for so long, maintained the status quo.
Without real change to existing power structures, our future is just going to be a bleaker version of our present. Elevating those with diverse identities can enact that change if it is done deliberately and without compromise. And no matter how it is done, we would do well to remember the wisdom of De La Soul: the stakes is high.
