Six ways NEDs can address culture, diversity and inclusion in their workforce and in the boardroom

Boards and non-executive directors (NEDs) have a key role to play in helping organisations build more diverse and inclusive environments and workforces that are more representative of society. NEDs, chairs and nominations committees also have the power and influence to increase the number of under-represented groups in the boardroom, including professionals from BAME backgrounds.

Acknowledge the lack of representation of BAME professionals in the boardroom, C-Suite and leadership pipeline

The Parker Review update report on ethnic diversity on boards highlighted that 37% of FTSE 100 boards have no BAME representation (down from 50% in 2017). FTSE 250 boards are even less diverse than FTSE 100 boards, with 69% of respondents having no ethnic representation in their boardroom.

Across the FTSE 350 there are 2,371 director positions for which ethnicity categorisation is known (90% of the total 2,625 director positions). Directors of colour held 178 of these positions, representing 7.5% of these roles (6.8% of the total). With Five BAME directors on the boards of more than one company in the FTSE 350, there are 172 directors of colour in the FTSE.

Understand that diversity contributes to the sustainable success of your organisations

McKinsey’s February 2015 study, Diversity Matters, found a:

“Statistically significant relationship between a more diverse leadership team and better financial performance. More diverse companies are better able to win top talent, and improve their customer orientation, employee satisfaction, and decision making, leading to a virtuous cycle of increasing returns. That in turn suggests that diversity beyond gender and ethnicity/race (such as diversity in age and sexual orientation) as well diversity of experience (such as a global mindset and cultural fluency) are also likely to bring some level of competitive advantage to firms that are able to attract and retain such diverse talent.”

Understand that inclusion and culture are part of the solution

Diversity without inclusion does not work. This is because diverse professionals, operating in and outside the boardroom, need to be engaged, feel respected and be listened to when they express their point of view and potentially challenge the status-quo. Culture is therefore part of the solution.

Engage with subject-matter experts and your HR director to challenge the status-quo

Boards should engage with diversity and inclusion champions and ask themselves what they could do differently. This is a time for boards and NEDs to have conversations among themselves and learn about the issues affecting the black community in the US and beyond. For example, what do boards and NEDs need to do differently:

  • In their succession planning discussions and recruitment process to attract a more diverse pool of talent and open the boardroom to BAME professionals?
  • To address unconscious bias in the recruitment process across their organisation, including at board level?

Consider intersectionality

Diversity is multi-dimensional. Too often, we focus on a single dimension of diversity, such as women on boards or ethnic monitories on boards. There is far more value in looking at multiple dimensions of diversity. For example, how can boards and NEDs attract young, female BAME professionals to the boardroom?

Hold chairs and nominations committees accountable for inclusive leadership

As always, the tone from the top is critical. Chairs and nominations committees should demonstrate inclusive leadership and commit to diversity and inclusion. This means reviewing the current succession planning and board appointment processes, and investing in recruitment, development, training and education across all levels of their organisations.

The time for boards to act is now. NEDs and other board members should play their role as decision-makers to build diverse and inclusive organisations, and increase the representation of under-represented groups, including BAME, in UK boardrooms.

NEDonBoard is the institute of board members and the professional body for non-executive directors and board members. Our mission is to produce boards capable of realising today’s opportunities and meeting tomorrow’s challenges. We do this by equipping boards with principles, knowledge and skills that recognise commercial success is underpinned by strong corporate citizenship, responsibility and sustainability. Please visit our website or contact us for more information.

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