Technology has changed the world. It has shifted markets, changed the way we conduct business, connected billions of people around the world, and introduced many more transformative forces that would take too long to list here. Technology is at our fingertips with the aim to improve, make more efficient, and foster broader connections in business and beyond. Therefore, it's no surprise that technology can also drive a more collaborative and productive board culture.
Technology isn't new to the boardroom. Accessing and leveraging the latest enhancements has become critical to board success as the need to address investor demands increases across many fronts. From the introduction of smartphones and tablets to board portals to online board evaluations, enhancements to promote better governance have now extended to board refreshment. The audit and compensation committees have spent time in the harsh spotlight over the last 20 years, and the investor focus is squarely on the nominating and governance committee today. Shareholders--institutional and activist alike--are focused on understanding the director nomination process and why U.S. public companies are lagging so far behind foreign counterparts with regards to diversity in the boardroom.
How Technology Makes It Easier to Find Diverse Board Candidates
Six hundred. There are currently more than 600 companies in the Russell 3000 index that do not have any women serving on the board of directors. Conversely, there are only 22 companies in the index that have reached gender parity--or 50% female representation--at the board level, according to the most recent Equilar Gender Diversity Index (GDI). While consistent data does not exist regarding ethnicity representation, indications from various studies tell a startling narrative of diversity in corporate boardrooms.
What if technology existed to help boards make better connections to diverse candidates in their own network? What if that technology could do so in a matter of a few seconds with a few clicks? How could that possibly be ignored? The answer is simple: habit. There is a level of comfort in the habit of recruiting from a known, personal, word-of-mouth network. The intention is not necessarily to avoid diversifying the board, but to ensure that collegiality, norms, and board chemistry remain intact. And as a result, many highly qualified candidates are overlooked.
The technology to expand director searches exists today, and adoption is...