Boards and non-executive directors have a key role to play to help organisations build more diverse and inclusive environments and workforces that are representative of society. NEDs, Chairs and Nominations Committees have a role to play to increase the representation of under-represented groups in the boardroom, including professionals from BAME backgrounds. In this blog, we discuss the ways in which NEDs and other decision-makers at board level can address culture, diversity, and inclusion issues, starting with why addressing such issues should be on their agenda.

Acknowledge the lack of representation of BAME professionals in the boardroom. Boards and NEDs must also consider the composition of the C-Suite and leadership pipeline.

The Parker Review indicated in its 2020 report that 37% of FTSE 100 boards have no BAME representation on their boards (down from 50% in 2017) and that FTSE 250 boards are even less diverse than FTSE 100 boards with 69% of respondents with 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 the positions, representing 7.5% of these roles (6.8% of the total). With 5 BAME directors on the boards of more than 1 company in the FTSE 350, there are 172 directors of colour in the FTSE.

Understand that diversity contributes to the sustainable success of their organisations.

In a February 2015 study (Diversity Matters), McKinsey found “statistically significant relationship between a more diverse leadership team and better financial performance”. It is because “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 alone is not sufficient.

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 & 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.

What do boards and NEDs need to do differently in their succession planning discussions and in their recruitment process to attract a more diverse pool of talent and open the boardroom to BAME professionals? What do boards and NEDs need to do differently to address unconscious bias in the recruitment process across their organisation, including at board level?

This is a time for boards to engage with subject matter experts as well as with their HR director and their workforce to challenge the status-quo.

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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 instance, how can boards and NEDs attract young female BAME professionals to the boardroom?

Hold chairs and Nominations Committee accountable for inclusive leadership.

The tone from the top, as always 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.

Written by Elise Perraud, NEDonBoard COO

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