At Livingston James, our ethos behind the search is always modelled on first principals, ensuring a focus on inclusion and diversity is well proportioned into our selection processes. We firmly believe that equality and representation in the boardroom really does matter.
According to data from MyLogiq, 30% of companies in the Dow 30 have female directors, whilst only 23% of companies in the Russell 3000 index have female directors. In addition, a recent study by DiversityQ into FTSE 100 businesses showed that white males make up 62.% of boards and occupy 83.8% of executive directorships, white females make up just 28.2% of boards, BAME* males 6% and BAME females just 3.8%,
These statistics show there is still a long way to go until board equity is reached. With more businesses than ever before anxious to bring a diverse range of candidates into the boardroom with fresh experience, we examine the impact of business leaders committing to achieving better balance within their organisations, allowing boards to operate at an optimal level.
So what should a board expect when looking to expand and diversify their leadership team?
It goes beyond profit and loss
Covid 19 has created a game changing, corporate and social leadership challenge without comparison. Due to conditions that cannot be changed, the role of the legal entities in leading through and beyond the pandemic is starting to shift. Social issues are integrating into corporate value propositions at an accelerated level and this extends far beyond a profit and loss balance sheet.
Elevation of decision making
Diversity in the generic sense is essential because it brings a broad range of experiences, perspectives, backgrounds that ultimately lead to better decision making. Optimising the boardroom decision making process is seen as goal for any organisation in what is now an even more highly complex and uncertain world. A 2018 study by the Boston Consulting Group showed that organisations with diverse leadership teams reported 19% higher revenue linked to innovation than organisations with below-average diversity scores. A Harvard Business Review study suggested that gender diversity on boards could improving overall decision making for the company. The evidence speaks for itself.
Understanding the markets your company serves
Business leaders are under daily pressure to understand the markets their companies serve, their employees, and the complex issues and evolution their businesses must make to survive. For this reason, it is essential that the board better reflect these markets, which include diversity of gender, race, sexuality, and neurology, bringing with it a wider range of experiences and differing world views.
Diversity enhances the complex responsibilities of the boardroom
A 2020 study looking at increased female participation on boards revealed that companies with a strong gender balance on the board and a high concentration of female directors are more likely to demonstrate strong corporate Social Responsibility and Environmental Management. The Board of directors is a key element of the governance structure of any business due to the role it plays in monitoring and supervising management practices. Boards that are diversified in terms of gender demonstrate greater commitment to ethics with a greater likelihood to take into account interests of a wide variety of stakeholders and communities. In short, board diversity would seem to be a good thing for our global and environmental health and sustainability.
The values and perspectives that diversity can bring to boardroom leadership environments are needed now more ever. The research backs up what we need to evaluate post-Covid, and that includes corporate boardroom. Increased diversity could provide the answer for many boardroom leadership challenges. These reasons alone are enough to look at your organisation’s diversity programme as an investment, rather than as a cost. By spending more on building an inclusive leadership team, you could be significantly reducing long term cost.
To discuss your leadership recruitment needs contact [email protected]
*Black, Asian, and Minority Ethnic. It should be noted that this term is not accepted universally by those groups it is used to represent