Actions for Diversifying Corporate Boardrooms (VIDEO)

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There are specific actions companies can take now to diversify their boards. Sharing those actions was the focus of an Advancing Diversity Week conversation titled "Diverse Board Recruitment Solutions -- Paying It Forward" with Constance Cannon Frazier, Principal of Cardinal Change Consulting; Mike Kelly, Founder and CEO of Kelly/Newman Advisors, and WomenAdvancing.Org editor Kate Byrne. Sharing new diversity research and actionable insights, Frazier and Kelly presented tactics boardrooms can use to broaden their pool of candidates. Expanding the aperture to "non-typical" board directors starts with inviting people with functional expertise, Kelly explained. "We specifically stated which areas at the company need help, such as human resources, marketing and sales; and rather than shoot for a former CEO or a president, or a current board director at a big company, we shoot for somebody extremely prominent in that functional area. That opens up a pool of candidates who tend to be more diverse in their backgrounds." (You can watch the entire conversation in the video above.)

Frazier and Kelly worked with Strategy Source and a team from SMU on a study to review the current state of diversity in U.S. corporations. The study reviewed over 90 articles, including the five-year McKinsey series investigating the business case for diversity, and the Credit Suisse "Gender Diversity and Corporate Performance" report. One of the findings was that women need to hold at least three board seats to create a critical mass so a company can make significant gains in terms of financial performance.

Frazier presented findings from the main body of research, which collected data from a sample of 30 ad-tech and mar-tech private company boards of directors. The results were hardly groundbreaking, but they confirmed that the state of diversity in U.S. corporate boards is way behind the diversity of the workforce. Eighty-two percent of board members were male, 86% were white, and only 2% were African American. Women of color only held 4.6% of board directorships while representing 18% of the population.

Frazier and Kelly started their boardroom diversity initiative after serving together as board members at Quantcast. They discussed the challenges companies are facing when they try to increase diversity in the boardroom. To effect real change, they found it's important to address the "why." Public companies have legislation and public expectations to meet but when it comes to private companies, there is little incentive to diversify the boards except for the right business reasons. To make corporations see the actual benefits of diversity, companies must come up with a rock-solid business case for diverse boards. "Diversity is not a 'nice to have' or even just the right thing to do," Frazier asserted. "It is essential to business success."

Kelly's final advice for board recruiters is to dig deeper into their networks and search for diverse candidates, as well as tap into companies that have successfully diversified their boards.

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