Want Better Business Results? Build a Better Boardroom

In 2020, our country continues to grapple with racial injustice and many companies are scratching their heads trying to figure out what to do next. Some companies are attempting to move beyond the perfunctory gestures of making empty Black Lives Matter (BLM) statements to larger actions of substance, like forming employee resource groups, comprehensive diversity training, or even hiring or appointing someone to lead diversity, equity, and inclusion (DEI) efforts. These are all a step in the right direction, but I’ll argue the moment calls for deeper commitment at the highest levels.

Organizations need to think bigger as to how they can make meaningful, long-term, positive contributions to a more just and representative society. Below are two significant ways to help advance progress and its permanency.

1. Bolster the Board

There’s an old adage that leadership starts at the top, and focusing on the board of directors is the most logical starting point. At present, Black CEOs represent just 0.8 percent of Fortune 500 companies which amounts to an abysmal three people. Black people make up 13.4 percent of the U.S. population–it is mathematically improbable that only three Black people could ascend into those ranks. And if the primary function of a board is to provide strategic direction and purpose, then board representation merits deeper investigation, because if your board is lacking representation, it is missing critical diversity of perspective.

Organizations like the Executive Leadership Council, the Board Challenge, and the Board Diversity Action Alliance are working to enhance the preparedness of Black executives. Together, these efforts will help companies increase the aperture of perspectives to better respond to the financial, environmental, cultural, and demographic complexities each organization faces–today and tomorrow.

Something I always ask is, “Does your message meet your market?” This is an essential question that every board should ask. Because if you have a homogeneous board, you are potentially limiting your understanding of the markets you wish to reach or serve because you simply don’t have the diversity of perspective needed to meet (let alone fully understand) the market. You’re basically reduced to just market segments because of board myopia and group-think.

2. Focus on Leadership

Far too often, organizations fall prey to what I call the hiring trap–they focus their hiring in the wrong areas, say, exclusively on entry-level roles. It’s a trap because entry-level folks are more plentiful to find but that practice doesn’t contribute to the longer-term growth strategy.

A better strategy is developing an evergreen pipeline of historically underrepresented talent, from director down to middle-level management. Identify a rolling list of talent you need, not only today but into the future, so that you’re equipped and ready to quickly source talent into key roles.

When hiring talent who have been historically and insufficiently represented into leadership roles, a virtuous waterfall effect can occur. Representation becomes top of mind for the organization because those leaders can actively pull from their respective networks to reach candidates who typically may not be on the recruiting radar. Those leaders also provide a visible signal to early career folks that progression is a possibility and not some unreachable pipe dream.

Staff, particularly those of color, need to know that they can actually ascend into leadership roles, and by having representative leadership, organizations demonstrate it’s not only possible but actively happening. When it comes to progression, it’s difficult to aspire to be it if you can’t see it.

At the end of the day, it comes down to leadership that is representative and inclusive of the people and the customers they serve (and hope to serve).