Diversity and Inclusion in the Boardroom

diversity and inclusion in the boardroom

The twin concepts of diversity and inclusion were rising to overtake ‘culture’ as the leading ideals for organisations at the close of 2019. There is no doubt that they will take a back seat for a while as Australian companies respond to the challenges of the COVID-19 pandemic.
 

We will be changing many of our traditional ways of doing things (culture) on the other side of this pandemic. Now is the time to embrace D & I, meet its cousin ‘belonging’ and see if we can launch into the post virus world fully engaged with our stakeholder communities. Indeed, Kevin Dolan et al, in a recent McKinsey Report, say it will be crucial for recovery.1

 

“Diversity is incredibly important, and not just gender diversity. We need to ensure that we have people with a diversity of technical skills and capabilities, diversity of age, as well as those who have the scars from decisions that didn’t go so well”2 says Richard Goyder AO.

 

The argument is made that the board should incorporate a range of skills suitable for the business of the company and that the directors should be drawn from a broad cross section of society.

 

Consider however, companies that provide products and services for particular sectors of the population. Helen Nash argues for a customer advocate voice in the board room as this enhances the organisation’s customer centricity.3 For example; should the diversity in the board room be the same for a company providing farming equipment as a company providing kitchen equipment? We might think of the customer being mainly men in the first case and in the other mainly women. We base these assumptions on what we observe around us, including what we see in the media. However, who makes the buying decisions and how are they made? Answering these questions helps us to be ‘customer centric’. Fred Geyer argues that there are ‘four paths to purchase’4 namely, Habitual, Discovered, Delegated and Considered. Directors should understand the path their customers are on, and how to embrace them.

 

Board diversification which incorporates target customer representation enhances the planning for the future but does not necessarily enhance the compliance roles. Here lies a cultural problem. Boards tend to spend more time on past and present performance (compliance) and precious little on future planning. There is no pressure to diversify a board that rarely looks at future strategy and policy making for tomorrow. Could it be that such companies will not survive COVOD-19, not because of the economic impact alone, but because they have spent precious little time on future strategy, planning and resourcing? Could this be the real problem behind Virgin and the NRL?

 

Mandi Wicks, the Director of audio and language content at SBS, says “There is an increasing acceptance that Australia at its core is a very diverse country. There is enough research to show that if you allow staff to bring their ‘whole self’ to work, be it their culture or their faith, that has good business outcomes, regardless of the purpose of the organisation”5 This bringing of your ‘whole self’ to the board room – where diverse opinions, viewpoints, approaches and styles are encouraged is the key to inclusion.

 

Note however, that this ‘inclusion’ is a vague concept, partly because the word is used alongside the stronger ‘diversity’. Some commentators refer to it as nothing more than ‘doing diversity’. Literally appointing people of different backgrounds and opinions. Dr Anita Sands6 puts it like this, “Diversity is a fact (the numbers are what they are), inclusion is a choice (you decide whether to include someone or not)”. When you apply this definition of inclusion, you have to then add ‘belonging’ to incorporate the sense of worth; of value in everyone around the table. Dr Sands goes on to say, “but belonging is a feeling that can be enforced by a culture that you can purposefully create. The best thought out D & I strategies will go so much further in cultures where people feel they belong because when we’re seen and valued for who we really are – our own unique and authentic selves – we thrive, and so do the people around us.”

 

However, what if ‘inclusion’ were thought of as the result of how we treat others – particularly those who are different to us? What if it is not just ‘chosen’ but ‘included’? And to be included, you are accepted, respected, welcomed and encouraged to participate.

 

Whereas ‘diversity’ describes the mix of people around the board table, ‘inclusion’ is the value that allows each person to participate as themselves. The result of which is a feeling of ‘belonging.’ Inclusion as a value, needs to be championed and actively upheld, so how do we understand it?

 

As a value, inclusion is an ideal that directors hold in common. Just as those gathered around a board table regard values such as honesty and integrity – as ideal traits of their fellow directors, so too should be inclusion.

Values are shaped by our outlook on life and the relationships of ourselves to others. Inevitably, we feel most comfortable in the company of people who share the same values as ourselves. The value, inclusion is found in a director’s concept of themselves and their attitude to others. It involves the placing of worth in others regardless of how that other person presents. It’s positive ‘value judgement’.

 

For us to be truly inclusive we have to be aware of our own biases, attitudes and failings (recognising and accepting them) and be prepared to place in others a level of worth that demands our close attention to them and an openness to hear their contribution. To be inclusive, one must value others; one must credit them with the same level of importance as everyone else regardless of other presenting characteristics.

 

The challenge to embed inclusion as a value in a board is complex. It will take extra time, cause extra debate, involve challenge to our ideas and effort to counter them, but at the end of the day, directors will feel that they belong, and superior outcomes will be achieved.

 
 
 
1.  Dolan.K, Hunt.V, Prince.S, Sancier-Sultan. S. Diversity Still Matters, McKinseyQuarterly, May 2020.

2.  Goyder, R. AO Issues facing directors today as they prepare for the future. AICD Governance Summit 2020 Reader p 165

3.  Tarrant, D. 6 Tips for becoming a customer-centric organisation, Company Director Aug 2019

4.  Geyer. F, Paths to Purchase. Marketing Management, Spring 2010 pp24-29

5.  White. S, Diversity is Important, but inclusion is the key. SMH 11 April 2020 p8.

6.  Sands. A, https://medium.com/@AnitaSands/diversity-and-inclusion-arnt-what-matter-belonging-is-what-counts-4a75bf6565b5
 
 
Chris Bertinshaw is the Managing Director of Inclusive Boards Australia. www.inclusiveboardsaustralia.com.au
 
 
This article was first published in the Better Boards Conference magazine, July 2020

Chris Bertinshaw About Chris Bertinshaw

With the backing of 30 years’ experience as Chief Executive Officer of six very different organisations, Chris Bertinshaw has been consulting with a range of public and private companies providing advice on corporate governance and effective management.
 
At the time of writing, Chris is the Chairman of Relationships Australia NSW Limited. He is a Director of St Andrew’s House Corporation and a non-executive director of Swimply Australia Pty Ltd. Chris was the Executive Director of the Australasian Spinal Cord Injury Network Ltd (ASCIN) and General Manager of Parramatta Mission. Prior to that, he was the Managing Director of Dtecht Pty Ltd, an award-winning fraud risk management company which developed high speed processing technology to identify potentially fraudulent health claims prior to payment of health transactions. Before moving to Dtecht he was the Chief Executive Officer of the Commonwealth Bank Health Society (CBHS) for eight years.
 
Chris has a contemporary Masters in E-Commerce degree from the University of New England to complement his Bachelor of Business/marketing degree from the University of Technology, Sydney. He holds a Diploma in Theology from the Australian College of Theology and, having gained a Company Directors’ Diploma, is a Fellow of the Australian Institute of Company Directors. For many years Chris facilitated the AICD director education programs in Australia and Fiji specialising in corporate governance, finance and strategy and risk.

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