Diversity and Inclusion--On the Board, in Management, in the Company: Going beyond gender diversity.
Position | THE CHARACTER OF THE CORPORATION |
Board diversity has now become a legislative--and exchange --issue. California and New York have adopted legislation outlining director diversity mandates. More recently, the Nasdaq stock exchange petitioned the SEC to adopt a new listing rule that mirrors the California legislation.
"It's not good enough just to say we got a woman on the board--typically a white woman--and the job's done," says Anne Simpson, managing investment director of board governance and sustainability for the California Public Employees' Retirement System (CalPERS). The system is responsible for $440 billion in investments.
When searching for new directors, companies should consider board diversity to be as important as a good mix of professional skills, says Michelle Hooper, a director of United Airlines and United Healthcare Group. "Boards are becoming much more intentional and saying, 'We want to bring that ethnic or racial diversity into our boardroom. We want these types of skills. We are not going to fill that seat until we get an ethnically diverse candidate to fill it. 'You are not compromising the quality of your board by waiting. I can't say that enough.
There are great people out there. You just have to go out and find them.
But the work doesn't stop there. Boards must also pay attention to inclusion --bringing a director into important conversations and the culture of the boardroom.
"Just because somebody offers you a board seat doesn't necessarily make you a fully accepted director," Hooper says. "There's a process by which that happens, and you need to be very aware and conscious of that. And as we make our boardrooms more reflective of the country, of our products and of our stakeholders, we need to be very aware that the prominent voice can no longer...
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