The Board's Role in Cultivating an Inclusive Culture: 'Just selecting a strong group of high-ranking executives doesn't cut it, say PwC and Ariel Investments chairmen.

Author:Ryan, Tim
 
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Mellody Hobson, co-CEO of Ariel Investments and vice-chair the board at Starbucks and JPMorgan, has consistently talked about greater opportunities for minorities, women and other underrepresented employees at all positions.

"When I'm in boardrooms, I seek to ask questions," she said in a 2018 TED interview titled, Mellody Hobson challenges us to be color brave. "And when asking questions, you put people in the position of having to respond, or at least to think. And so even if it's not work, if you're not in that hiring position, you might say, 'Listen, I've noticed, wow, we're attracting the same kind of people over and over again. What can we do to expand the opportunities?'"

When it comes to talent management, the traditional role of boards has been to provide oversight of the c-suite, including CEO succession. But many boards have recently realized that just selecting a strong group of high-ranking executives doesn't cut it.

The c-suite must be able to execute a successful growth strategy, which requires talented people and strong succession planning at all levels of the company.

With the lowest unemployment rate in the past 50 years and an environment of sweeping technological change that requires new skill sets, attracting, developing and retaining broad, exceptional talent is so critical to corporate success that it has begun to move onto many board agendas.

While diversity and inclusion (D&I) are one element of a talent management strategy, far-sighted boards recognize its growing in importance as a priority. One of the reasons is obvious: Workforce demographics continue to diversify. By 2045, many demographic experts predict the U.S. will be a "majority-minority" nation where non-Hispanic whites of all ages comprise less than 50% of the total population. And by 2020, for the first time, a majority of people under age 18 will be people of color.

There are shifts for women in the workforce as well. In 2018, women represented 46.9% of the U.S. labor force. Women also have earned more bachelor's degrees than men since 1982, more master's degrees since 1987, and more doctorates since 2006. Yet, there are only 33 women CEOs at Fortune 500 companies and 2019 was the first time that all of these companies had at least one female director.

In recent years, several extensive studies have demonstrated the financial benefits of a diverse workforce. These studies concluded that companies with greater ethnic/ cultural diversity as well as...

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