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“Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.”
— Sherlock Holmes
Every board is different in its own way. Each will find a solution to diversity that works for its market, the company culture, and the times we live in. Below you will see my recommendation because the impediments that exist are very difficult to overcome from ‘within’ the boardroom (see part II of this article).
Diversity makes a significant difference in board competence. Directors who think differently react differently and can be the dividing line between success and failure. Alfred Sloane, the founder of General Motors, once dismissed his board because everyone was in agreement. He asked them to return once they were able to debate. Now the imperial CEO is a relic of the past, groupthink is behind every disaster that plagues the modern business world.
Yet, as we hang our hats on race and gender diversity alone, it ignores another kind just as important, diversity of thought. The substance of this argument is if you draw directors from similar backgrounds and education, you end up with diversity in appearance and similarity in thinking. It means we have the same problems, with a new class of directors to blame.
That leads to an inescapable conclusion — we need global diversity. Expertise in Asia, Latin America, and Middle East/Africa will also bring racial and ethnic diversity as part of the package.
The challenge is how to operationalize given the logistics of travel from these parts of the world and frequency of board meetings. There is an answer, and it means thinking outside the boardroom box.
How can you increase the number of women, minorities, and other missing ingredients from the board, find them on a global scale, train them as directors, and have a ready pool of qualified candidates?
Here is how the math works: there are roughly 5,000 public companies and they convene an average of 10 board directors. It amounts to 50,000 directors in America, and it means we need to recruit 25,000 to achieve parity inside the boardroom.
I propose the following.
“I believe in the notion that great companies will stand among humankind’s noblest inventions.” — Peter Drucker
Directors have a fiduciary duty but collectively they have a duty to society. Gender fairness in the boardroom is on both of those ‘to do’ lists.
Note: After Per Sarbanes- Oxley, compensating people for advising the company makes them ineligible to serve as independent directors (for a period of three3 years). Once the cohorts are ready to become directors, companies can create a second tier of non-voting board members or appoint them as non-independent directors. (Note: Google’s Eric Schmidt is a non-independent director).
Other parts of this article:
Part I (Silicon hypocrisy)
Part II (media’s problem)
Jeff Cunningham is an advocate for enlightened global leadership, which he calls the most valuable natural resource in the world.
He is a Professor at ASU’s Thunderbird School of Global Management and was the former publisher of Forbes Magazine, startup founder, digital content CEO, and ran an internet venture capital fund.
He travels the globe in search of iconic leaders. As an interviewer/host, he created a YouTube interview series, Iconic Voices, now co-produced by @Thunderbird, featuring mega moguls from Warren Buffett to JeffImmelt. His articles on leadership have been featured in the Arizona Republic, LinkedIn and Medium via JeffCunningham.com.
His career experience includes publisher of Forbes Magazine; founder of Directorship Magazine; CEO of Zip2 (founded by Elon Musk), Myway.com, and CareerTrack.com; venture partner with Schroders. He serves as a trustee of the McCain Institute and previously as a trustee of CSIS and Middle East Institute, and as an advisor to the Nobel Peace Prize Committee.
He has also been a board director of 10 public companies.