I am a first time CEO. While I have had strong and fulfilling relationships with the Boards of organizations, I was never able to choose the members myself. Knowing that I had two members of my Board moving on within my first year as CEO, I had an opportunity to fill two spots and I wanted to get it right. I wanted a diverse Board and also felt I had to address some specific experience gaps. I researched. I read. I asked a member to bring me to an NACD meeting. I spoke with other CEOs got input from my team and my existing Board members. I managed to achieve analysis paralysis.
Then I attended the First Annual Women’s Power Gap in Corporate Massachusetts Survey & Rankings in February 2020.
The findings presented were unsurprising – women and people of color represent 51.5% and 28%, respectively, of the state’s population yet are significantly underrepresented in leadership positions. As a woman in leadership, I’d heard it before – maybe with different numbers, but the same general findings.
Then the panel started. The moderator began with a typical excuse for why there were so few women and people of color on boards: “I don’t have any open spots.” After the panelists discussed the challenge and how it was a difficult reality to address, another panel member said, “Tell them to add another Board seat.”
I felt so stupid.
Add another Board seat - duh, it was that easy. I am an innovator, damn it. So, I checked my Governance By-Laws and now…
I’m very excited to announce four new members of the MassChallenge BOD, who were added between December 2019 and March 2020.
My motivations for building a diverse board are, without question, to make headway in improving diversity and inclusion efforts across the organization and the tech industry at large, but it’s also to make my business stronger and my decisions better.
The MassChallenge BOD is not just a governance board but a provider of essential advice. They are actively involved in all major decisions. They provide insight, feedback, and coaching. In addition to providing varied perspectives during open discussions, the board members meet with me regularly for 1:1 meetings specific to their areas of expertise.
For me, assembling a diverse board is not about only looking at gender, age, and race (though these are very important) but also backgrounds. It is powerful, in one BOD meeting, to hear from a PhD in Engineering and Applied Sciences in addition to a corporate lawyer with extensive government experience. That they’ve developed their skills and insights from different perspectives due to their gender, or culture, or race is a tremendous advantage. We also have a sizeable spectrum of ages with members in their 40’s, 50’s, and 60’s. The discussions can get spirited and are always full of insight.
Really the only component that is homogenous about our new board is each member’s commitment to the innovation economy – a belief that entrepreneurship is key to solving global problems and economic growth.
I want the Board to reflect the ideal company/employee diversity as well as diversity across the innovation ecosystem. There is still more work to be done. I hope to continue to improve diversity on the Board that will reflect all types of backgrounds and identities.
Board Diversity Results in Better Business Outcomes
In a 2018 McKinsey report looking at data across three different English-speaking countries, they found that companies with the more ethnically/culturally diverse boards were 43% more likely to experience higher profits.
A common sense breakdown of that metric could be that diversity provides different points of view, different modes of approaching a challenge. Stephane Kasreil, the CEO of Upwork, articulated this well in a TechCrunch article: “The whole point of having an eight-person board is to have eight very different and complementary — though sometimes conflicting, and that’s OK — perspectives.”
This seemingly simple, but greatly overlooked, concept is further backed by Carol Fulp, author of Success Through Diversity:
“Besides better decisions grounded in more candid and inclusive discussions, Board diversity affords an array of other benefits, including an enhanced ability to acquire and leverage talent, increased innovation, and a heightened ability to reflect the marketplace and cement the organization’s reputation.”
I wrote “seemingly simple” concept deliberately, because diversity only has a positive impact on organizational strategy if the board members, all the board members, are regularly consulted and valued. They can’t just be figureheads.
Listening is an essential aspect. In a piece from Harvard Business Review titled When and Why Diversity Improves Your Board’s Performance, which interviewed 19 board members, found that there was a spectrum to board structures: hierarchical to egalitarian. The lead writer of the piece, Stephanie Creary wrote, “These dynamics appear to shape whether diversity on the board actually matters to the board’s work. On more hierarchical boards, the CEO, Chairman, or lead independent director tends to dominate board meetings.”
In matters of diversity, listening should be seen as paramount and not merely checking boxes for the sake of optics.
I want to clearly state that this initiative is by no means bold or risky and I deserve no accolades for this approach. It is simply the strongest strategy – why would you want a board of people who look, think, and talk just like you? How would that provide anything other than blind spots?
Going back to Carol Fulp, of whose book I strongly recommend: “There are really no downsides to a board of diversity and inclusion.”