In the UK, we share a vision for board appointments to be made with due regard for the benefits of diversity and inclusion. Boards and stakeholders know that board diversity matters. When seeking a new board member, any process that results in a shortlist without any women; or candidates from BAME (black, Asian, minority, ethnic) backgrounds is likely to be questioned.
Whilst there is currently a strong push for gender (more female representation) and race diversity on boards, I have met anyone who wants to be appointed based on their gender or ‘diversity’ alone. You are probably more diverse than you know. The trick is to know why it is valuable at board level and which organisations will value it enough to appoint you.
Board diversity matters to boards and the appointment process
A recent BCG study suggests that “increasing the diversity of leadership teams leads to more and better innovation and improved financial performance. In both developing and developed economies, companies with above-average diversity on their leadership teams report a greater payoff from innovation and higher EBIT margins. Even more persuasive, companies can start generating gains with relatively small changes in the makeup of their senior teams.”
“People with different backgrounds and experiences often see the same problem in different ways and come up with different solutions, increasing the odds that one of those solutions will be a hit. In a fast-changing business environment, such responsiveness leaves companies better positioned to adapt.”
Organisations are acting on shareholders evolving expectations of diversity, equity, inclusion and social responsibility at the corporate level. The 2021 UK Spencer Stuart Board Index collaborates that, for organisations, board diversity matters. Boards commonly seek candidates who can offer more than one element or strand of diversity. For these organisations, the list doesn’t start and end with age and gender diversity.
Thoughts on the six strands of board diversity
Six strands encompass the diversity spectrum:
There has been a long-time push to get more women on company boards resulting in significant improvements in gender diversity. Most newly appointed NEDs in the UK are women and now account for ~46% of non-executives. The FTSE Women Leaders Review set a target of 40% representation of women on FTSE 350 Boards and in Executive Committees to be achieved by the end of 2025.
If you are a woman, these figures sound favourable, but you must consider that you will likely be competing against other women for the same appointment. When this is the case, gender is no longer a differentiator or advantage for you. Therefore, you need to place less emphasis on gender and more on your points of difference. These competing females may have similar or better skills and experience. It would be best if you worked hard to develop a compelling reason you should be the one appointed.
If you are a male of a certain age, in the eyes of the board, you are seen as very appointable and statistically more likely to be appointed. However, gaining a board appointment today is arguably far more competitive for males than a decade ago. This is partly due to the push for female representation but mainly because of the sheer number of people pursuing board careers. Due diligence also prevails, so males can no longer assume they can rely on the “old boys club” to get a board appointment. They must be ready to compete by articulating what value they can add to a board.
Ethnicity, Religion, Sexuality & Disability
- 11% of board directors in the UK identify as minority ethnic.
- The Parker Review Committee’s target for FTSE 100 companies to have at least one non-white corporate director by 2021 has not been reached.
- Those with disabilities are underrepresented on boards.
- It is estimated that the percentage of LGBTQ+ NEDs in the UK is as low as 0.4%.
The average age of non-executive directors is 59, with little change in the past few years. However, as boards look for more diversity, inclusion and technical skill sets, the average age of new non-executive directors is dropping. If you are an aspiring NED, you need to focus on your unique offerings, not your age and possible lack of board experience.
Know the value of your diversity
In a sense, we are all diverse, not always in traditional or physical ways. We all bring diverse opinions and approaches based on your history or experience with any of the six strands. It has been proven that diverse boards deliver better outcomes for organisations; you have the opportunity to frame any diversity you bring as something of value to a board.
Diversity for its own sake is not valuable. You must be able to articulate the value of your diversity – not just that you are diverse. It is likely that you can bring some form of diversity to a board appointment conversation. Take to think about this! You then can articulate how your “diversity” can bring value to the board. More importantly, why is it more valuable than your competitors?
Organisations, society and shareholders see the need for diverse individuals and inclusion at the board level. Those who experience years of adversity often cope by developing resilience in life and the workplace. This resilience can be valuable to a board.
When it comes to your diversity, particularly in the board appointments process, you can use it to your advantage. Remember, it is not only gender diversity that matters. Ensure you point out all your diverse attributes in a way that will make you a more desirable candidate.
Board diversity matters, but not every organisation or board will value every element of diversity. So, target organisations that will value your diversity or experience in one or more of the six strands.
You must have a Board CV that articulates everything you offer a board, including any strands of or contributions to diversity. You will also need to be able to create a compelling Cover Letter for every board position that you apply for. When doing so, consider your competition and highlight your unique points of differentiation and diversity. The content of both will transpose to any formal or informal conversations you have regarding the appointment.
But don’t stop there. When preparing for your interview, know what your points of difference are and, just as importantly, why they are valuable; just because you are a female or male is not enough to convince the board. If the question about diversity does not come up during an interview, be proactive and highlight your diversity value when the opportunity arises for you to address the panel.
Regardless of your background or level of experience, you must make your case about what attributes you bring to the table and how they will enhance the board. Board diversity matters in its various strands and can set you apart from the competition. It is worth researching the current board members to determine what areas of diversity you can address. Do they lack the diversity or diverse insights that you can offer?
Gaining a board appointment has always been competitive, even more so today. Accepting this truth is the first step to better articulating your specific value to a board. This will separate you from your competitors and dare them not to appoint you. That is what our Board Appointment Training Series helps you do.
About the Author
David Schwarz is CEO & Founder of Board Appointments – The UK’s leading board advertising and non-executive career support firm. He has over a decade of experience in putting people on boards as an international headhunter and a non-executive recruiter and has interviewed over one thousand non-executives and placed hundreds into some of the most significant public, private and NFP roles in the world.