How Data Can Empower Diversity on the Board
Boards of directors set the strategic direction of a company, monitor its performance, and ensure that it complies with laws and regulations. But what role should data play in assembling these boards?
While there is no one-size-fits-all answer, data can help boards become more diverse, which can improve a company’s performance. McKinsey research has shown that companies in the top quartile for racial and ethnic diversity are 35 percent more likely to outperform their peers on profitability. Board diversity can also help boards make better decisions by considering a wider range of viewpoints.
Given these benefits, it is not surprising that there is a growing push for data-driven board diversity. In the United States, for example, a number of organizations are working to increase the number of women and minorities on corporate boards. One such organization, Board Members for Diversity (BM4D), is using data to identify qualified women and minority directors.
Board Members for Diversity (BM4D) is a 501(c)(3) non-profit organization that promotes diversity on corporate boards.
The organization uses data to identify qualified women and minority directors. It then provides these directors with information on board opportunities and helps them connect with board members and recruiters.
BM4D is a data-driven organization. It uses data to identify qualified women and minority directors.
The organization uses data to identify qualified directors by looking at a range of factors, including gender, ethnicity, and professionalism.
BM4D also uses data to help directors connect with board members and recruiters. The organization provides directors with information on board opportunities, and helps them connect with board members and recruiters.
This data-driven approach has helped BM4D achieve impressive results. The organization has helped place over 400 directors on corporate boards, and its members have served on over 2,000 boards.
Aspiring Leaders
From data to directed diversity
The board of directors (BOD) is the highest governing body in a company. The composition of the BOD is of critical importance as it decides on strategic matters, oversees management and ensures the company performs its fiduciary duty. The lack of diversity in the boardroom has been a long-standing issue and has been linked to a number of corporate governance failures. A study by Credit Suisse found that companies with at least one female director outperformed those without by 26%.¹ However, despite this and other evidence, getting women on boards has proved to be a challenge.
Credit Suisse’s study also found that having a greater number of women on the board leads to better financial performance.
In light of the mounting evidence in support of diversity on boards, there has been a renewed effort to increase the number of women on boards. In the United States, for instance, the Securities and Exchange Commission (SEC) has proposed a rule that would require public companies to disclose the diversity of their directors. This proposal is grounded in the belief that better disclosure will help identify companies that are doing better with respect to board diversity and will incentivize others to do better.
Data can play an important role in this effort. By understanding the factors that contribute to the lack of diversity on boards, we can develop targeted interventions to increase the number of women on boards. This paper will explore the role of data in promoting diversity on boards. We will first discuss the lack of diversity on boards and the various factors that contribute to it. We will then discuss how data can be used to understand these factors and develop interventions to address them. Finally, we will discuss the role of data in promoting diversity on boards and the benefits that diversity brings to companies.
So, why is there a lack of diversity on boards?
There are a number of factors that contribute to the lack of diversity on boards. These factors can be broadly divided into three categories:
1) Systemic factors
2) Structural factors
3) Cultural factors
Systemic factors are factors that are outside of the board’s control and include factors such as the number of women in the workforce and the number of women who hold executive-level positions. Structural factors are factors that are within the board’s control and include factors such as the number of board seats and the number of directors who are up for re-election. Cultural factors are factors that are within the board’s control and include factors such as the board’s culture and the way board members are selected.
Let’s take a closer look at each of these factors.
Systemic factors
Systemic factors are factors that are outside of the board’s control and include factors such as the number of women in the workforce and the number of women who hold executive-level positions.
The number of women in the workforce has been on the rise in recent years. However, the number of women in executive-level positions has not kept pace. According to the latest data from the Pew Research Center, women make up 26% of the workforce but only 5% of the CEOs of Fortune 500 companies.² This lack of parity is also reflected on boards. A study by MSCI found that only 16.1% of board members of S&P 500 companies are women.
These figures suggest that the lack of diversity on boards is not simply a matter of boards not trying to recruit women. Rather, it is the result of systemic factors that are outside of the board’s control.
Structural factors
Structural factors are factors that are within the board’s control and include factors such as the number of board seats and the number of directors who are up for re-election.
The number of board seats and the number of directors who are up for re-election are both structural factors that can contribute to the lack of diversity on boards.
The number of board seats is important because it regulates the number of directors who are competing for seats on the board. A study by Hefce found that when there are more board seats available, there is a greater likelihood of having more directors on the board, and a greater likelihood of those directors being women.⁴ This suggests that increasing the number of board seats can increase the number of women on boards.
The number of directors who are up for re-election is also important because it regulates the number of directors who can be replaced. A study by the Conference Board found that when the number of directors who are up for re-election is high, the likelihood of having a woman on the board decreases.⁵ This suggests that increasing the number of directors who are up for re-election can decrease the number of women on boards.
Structural factors such as the number of board seats and the number of directors who are up for re-election are within the board’s control and can be used to increase the numbers. on the board.
Cultural factors
In boardrooms across the world, there is a familiar face. It is often a white, middle-aged man. This is not a coincidence. Data shows that, in general, white males are overrepresented on company boards. While there are many reasons for this, one factor is cultural. In some societies, women and minorities are not given the same opportunities as white men, and this translates into the boardroom
Fortunately, data can help to change this. With the help of data, businesses can identify the talented women and minorities who are qualified to serve on the board. They can also track the progress of these individuals, and ensure that they are given the same opportunities as their white male counterparts.
This is not only the right thing to do, but it is also good business. A diverse board leads to better decision-making, and increased profitability. In order to take advantage of this, businesses need to use data to identify and promote diversity on the board. With the help of data, we can create a more equal and fair board.
Talk to us about planning your next Board and Executive Education Retreat
Lean Develop and Progress with PKT Company Retreat
