Diversity in Boards
Diversity in boardrooms can;
Drive more wide-ranging and probing discussions
Assist removing the blind spots
Improves financial performance, reputation, decision- making quality & innovation ability
Possess in-depth understanding of the stakeholders of organization
Globalization, speedy advancement of technology, increasing need for risk management & varying demographics of employees make businesses much more complex and require boards to expand their composition
How to bring diversity in Board
In TAPP, there are no females in Board and only 5% females work as senior managers
Implementing diversity in the Board is essential for board of the organization to improve their perception
Reasons that drive the need for diversity in board members is that the decisions of diverse board are highly effective (Myatt, 2013).
Board devises the strategies related to appraisal and effective problem solving skills (Goldberg, 2017).
In order to bring diversity in board and particularly to improve gender diversity in boards, it is essential;
Change mind-set towards making visible commitment towards diversity & including women in decision -making
Expand criteria by considering appropriate expertise in candidates instead of experience
Maintaining active pipeline by expanding network, by including more females
To bring diversity in TAPP organization, it is essential to;
Develop selection criteria that could bring diverse perspective
Use recruitment methods to approach minority communities not represented in the board team
Use expert recruitment consultancies & specialist job boards targeted at local communities or minority (Institute of Directors New Zealand, 2016).
To insist on finding candidates from diverse community.
Restrict the term limits for the board members to create opportunities
Review and Assessment of Problems
Lack of diversity in the boards might lead to discrimination on the basis of caste, creed and gender within the organization
Gender stereotypes is the main reason behind lesser number of females in boards or in senior management
Minorities are not provided the opportunity to get in board
Diversification of board could be obstructed due to;
Lack of acceptance among boards regarding diversity
Recruitment of trustees on the basis of contacts, wealth or influence
Young members are excluded from joining board to make them opt for salaried employment (Korn Ferry Institute, 2018).
Collective effort is essential to lead a diverse workplace
Every individual within the organization should take an open attitude to create and promote diversity
The Institute of Directors in New Zealand (IoD) believes that diversity in the boardroom brings innovation & increase performance (Institute of Directors New Zealand, 2016).
Specific objectives & strategies to attain diverse boards are;
Development and implementation of diversity policies & objectives
Modification of objectives as per the needs of the board
Ensuring sufficient & transparent disclosure about board diversity processes
Consideration of short-listed targets
Holding management accountable for developing diversity (Arts Council England, 2017)
Diversity in governance is essential but, should always be approached through established competence
Active initiatives should be taken to make a diverse blend of people work together with all their similarities & differences
Develop an ecosystem that nurture diversity and change culture
Diverse pipeline at senior management level to support development in governance roles and responsibilities
Objectivity should be increased by reducing biased decision-making
Recognition and effectively addressing unconscious biasness
Lack of diversity leads to ill-equipped boards who fail to respond to complex issues occurring due to rapidly changing market and increase risk for shareholders
Essential to create wider network of resources to find diverse and best suitable people for board without discrimination (Henderson, 2017)
Targets should be set in accordance with what matters for the organization (TSNE MissionWorks, 2018).
Diversity in board team proves to be beneficial for board members & organization
Healthy discussions among diverse boards lead to better decisions (Deloitte, 2017)
People from divergent backgrounds deal with problems in effective manner
Diversity in board makes it well-informed & sensitive (Russell Reynolds, 2018)
The percentage of women in boards is progressively converging towards equivalence
Lack of diverse role models in board team
Lack of blend in membership to increase opportunity to diversify.
Lack of extensive search to attract applicants from diverse environments (DeHaas, 2018).
Prevalence of ‘Group-thinking’ excludes new members
Barriers in effective board formation such as lack of access to board meetings (National Council of Nonprofits, 2018).
Should be objective
Should not reflect bias
Should be a comprehensive approach
Exceptional abilities, qualities and experience should be considered (Institute of Corporate Directors , 2017)
Should consider capabilities & skills of directors individually & collectively (aromaenterprises.in, 2018).
Conclusion
Diversity in the board is essential for organization as people from diverse backgrounds could represent the board effectively
Diversity in skills & abilities of people make them deal with problems with a different perspective (Equilar, 2017)
In TAPP, females should compulsorily be included in the board team and minority communities should also be given the opportunity to be a part of the board
Diversification of board should be taken into consideration by the organization
Diversity of perception and consideration is essential to keep pace in the rapidly changing business environment
Commitment and leadership can bring diversity in boards into practice at large scale
Effective balance of gender, ethnicity, age and experience on the board requires shift in the composition of board.
References
Aroma Enterprises. (2018). Boards’ diversity, evaluation, and performance. Retrieved from Aromaenterprises.in: https://www.aromaenterprises.in/pdf/policies/diversity.pdf
Arts Council England. (2017). How to create diverse boards? Retrieved from Artscouncil.org.uk: https://www.artscouncil.org.uk/sites/default/files/download-file/How%20to%20create%20diverse%20boards_0.pdf
DeHaas, D. (2018). The power of all types of board diversity. Retrieved from Deloitte.com: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/center-for-corporate-governance/us-ccg-the-power-of-all-types-of-board-diversity.pdf
Deloitte. (2016). Missing pieces report: The 2016 board diversity census of women and minorities on fortune 500 boards. Retrieved from Catalyst.org: https://www.catalyst.org/system/files/2016_board_diversity_census_deloitte_abd.pdf
Deloitte. (2017). 2017 board diversity survey: Seeing is believing. Retrieved from Deloitte.co.: https://www2.deloitte.com/us/en/pages/about-deloitte/articles/board-diversity-survey.html
Deloitte. (2018). Missing pieces report: The 2016 board diversity census of women and minorities on fortune 500 boards. Retrieved from deloitte.com: https://www2.deloitte.com/us/en/pages/center-for-board-effectiveness/articles/board-diversity-census-missing-pieces.html
Equilar. (2017). Exclusive interview: Empowering board evaluation and refreshment. Retrieved from Equilar.com: https://www.equilar.com/blogs/273-semler-brossy-board-diversity-interview.html
Goldberg, D. B. (2017). Bringing diversity on board a report on successful strategies to advance corporate board diversity. Retrieved from Mass.gov: https://www.mass.gov/treasury/about/media-pubs/treas-news/bringing-diversity-on-board-report-june-2017.pdf
Henderson, T. (2017, January 20). 11 strategies for achieving a more diverse and productive work environment. Retrieved from Forbes.com: https://www.forbes.com/sites/forbescoachescouncil/2017/01/20/11-strategies-for-achieving-a-more-diverse-and-productive-work-environment/#342d69c774d0
Institute of Corporate Directors. (2017). Board diversity resources. Retrieved from Icd.ca: https://www.icd.ca/Resource-Centre/Board-Diversity-Toolkit/Board-Diversity-Resources.aspx
Institute of Directors New Zealand. (2016). Getting on board with diversity: A guide to getting diverse talent on boards. Retrieved from Iod.org.nz: https://www.iod.org.nz/Portals/0/Governance%20resources/Getting%20on%20board%20with%20diversity.pdf
Korn Ferry Institute. (2018). Diverse boards: Do they deadlock more? Retrieved from Kornferry.com: https://www.kornferry.com/institute/diverse-boards-do-they-deadlock-more
Myatt, M. (2013). Top 10 reasons diversity is good for the boardroom. Retrieved from Forbes.com: https://www.forbes.com/sites/mikemyatt/2013/11/18/top-10-reasons-diversity-is-good-for-the-boardroom/#3b9feed31b90
National Council of Nonprofits. (2018). Diversity on non-profit boards. Retrieved from Councilofnonprofits.org: https://www.councilofnonprofits.org/tools-resources/diversity-nonprofit-boards
Russell Reynolds. (2018). Different is better: Why diversity matters in the boardroom. Retrieved from Russellreynolds.com: https://www.russellreynolds.com/insights/thought-leadership/different-is-better-why-diversity-matters-in-the-boardroom
TSNE MissionWorks. (2018). Step by step: A guide to achieving diversity and inclusion in the workplace. Retrieved from Tsne.org: https://tsne.org/step-step-guide-achieving-diversity-and-inclusion-workplace
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