In today’s corporate world, diversity in the boardroom is a buzzword. You’ve probably heard about initiatives to ensure more women and people of color are represented. But here’s the thing: just having diverse faces around the table doesn’t guarantee real inclusion or better decision-making.
Let’s break it down.
Sure, laws in many places now require a certain percentage of women or minorities on boards. And yes, we’ve seen progress. But is that enough? Our latest research says no. We wanted to see if having a diverse board actually changes how decisions are made and whether it leads to better outcomes for the company.
What did we find through IMPAAKT’s Women’s Day 2024 edition?
Well, having diverse voices in the room does make a difference—but only if those voices are heard and valued. With interviewing women in top leadership roles, we noticed something interesting. When women were fully engaged in discussions, boards made better decisions. They took more time to understand different viewpoints, leading to more unified choices.
So, what’s the benefit of this inclusive approach?
For starters, it makes for better teamwork. Boards that actively listen to all members tend to perform better financially. Companies with integrated female directors saw higher stock returns and fewer disagreements from shareholders.
But getting to this point isn’t easy. We found some common hurdles that keep women and people of color from fully participating in boardrooms.
First off, it takes time. New members need to earn trust and prove themselves, which can take years. Plus, their backgrounds might not match those of existing board members, making it harder to fit in.
Then there’s the issue of status. Directors with certain titles or experiences are often seen as more important. But women and minorities are less likely to have these credentials, so they start at a disadvantage.
And let’s not forget about social class. Those from lower-income backgrounds might struggle to connect with their peers, leading to misunderstandings and isolation.
But it’s not all bad news. Some boards are getting it right. How? By following a few key strategies:
- Choose a Chair Who Listens: A board leader who values everyone’s input sets the tone for inclusivity.
- Track Diversity Metrics: It’s not enough to count heads. Boards should measure how well they include voices from all backgrounds.
- Reach Out to New Faces: Actively seek out candidates from diverse backgrounds and mentor them for board positions.
- Empower Sub-Committees: Small groups within the board can help new members find their footing and contribute effectively.
- Build Trust Outside Meetings: Spending time together socially can help board members understand each other better, leading to more productive discussions.
The bottom line? Diversity is good, but true inclusion is even better. To make the most of a diverse board, companies need to go beyond quotas and embrace a culture where everyone’s voice is heard and valued.
