In the past, public company boards aimed for their members to be diverse in experience, expertise, age, ethnicity, gender, and geography. Over the past several years, the concept of diversity has become more dynamic. Today, the purpose of a diverse board is to ensure that there are diverse perspectives providing input on the issues confronting the company. To achieve this, boards need to be inclusive (which should be a measure of diversity) so all voices are heard, are connected, and there is a sense of belonging.
However, it is difficult for shareholders and stakeholders to know whether their board has enough diverse perspectives. Optics matter now just as much as substance. The demand for ethnically diverse board candidates with the typical experience needed to be attractive to a board seems to have exceeded the supply, especially for companies outside the Fortune 500. As 94% of RSR Partners’ board placements for public companies were diverse in 2019 (and we expect that percentage to be even higher in 2020), I wanted to share an insider’s point of view on the three most important guideposts when trying to recruit diverse directors to your board.
#1: Prioritize “Talent over Title”
Many boards continue to prefer recruiting current and former C-Suite executives with specific relevant experience (in industry or function). We advise clients to broaden their strategy and focus on addressing (1) the expertise that they need for the next 3 – 5 years and (2) the gaps in expertise on the current board. Boards who are willing to focus less on a candidate’s title and more on specific expertise have a better chance of identifying diverse candidates who also have the necessary knowledge to have a real impact and improve the effectiveness of the board.
#2: Do Your Homework
Approaching high impact board candidates is a combination of art and science. Over the past 20 years of recruiting Fortune 100 CEOs, former heads of state, academics, and entrepreneurs, I have found that the most successful outcomes are the result of having a deep understanding of the executive’s experience, expertise, beliefs, and interests before approaching any potential candidate.
#3: Understand the “Why?”
Individuals want to be asked to join a board because of who they are and what they do, not just because of how they look. We have seen diverse candidates turn down prominent board opportunities because they felt the board was just “checking the diversity box.” The third and most critical element of the process is to deeply understand why the experience, expertise, beliefs, or interests of a candidate directly relate to the company’s long-term strategy and how they can have an impact for years to come. If you can’t articulate the “why,” you need to go back to steps #1 or #2, otherwise you will undermine the very reason you need more diversity on your board.
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About Our Board & CEO Services Practice
Our Board and CEO Services team partners with CEOs and boards to understand issues, assess opportunities, and strategically advise to ensure sustainable growth strategies are optimized. We are committed to executing an action plan that addresses sensitive and complex leadership needs and ensures clients are well positioned for the future. RSR offers trusted advisement rooted in years of experience and market knowledge. We excel at optimizing board and CEO effectiveness through transformative thinking about structure and operations. This helps us to engage closely with clients to drive greater accountability and enhanced performance. Our practice group leverages RSR Partners’ renowned experience in corporate governance with the firm’s industry and human capital consulting expertise to create an integrated and seamless approach. The range of services we provide to boards and CEOs include:
- CEO Succession Planning
- CEO Search and Selection
- Managing CEO Transitions
- Director Recruiting
- Director Succession Planning
- Board Evaluations and Effectiveness
- C-Suite Search and Talent Pipeline Development
- Building High Performing Teams
- Leadership Assessment and Succession Planning
- Discreet and Thorough Candidate Due Diligence
- CEO Advisory Support
- Helping CEOs Select an Outside Board
RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1994 by industry icon, Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare. To learn more about RSR Partners, click here.