Beyond tokenism: What diverse boardrooms really look like

The business benefits of diversity on boards are generally well known. Collectively, diverse boards possess a broader understanding of their organisation and society at large, assisting in effective decision making and navigating an unpredictable world. Unfortunately, diversity is an ideal that is rarely realised holistically, and many of the business benefits of board diversity go unseen. Even for boards that do have strategies in place to improve diversity, the debate is often narrowly focused on observable diversity dimensions such as gender, ethnicity and age and follow ‘tick the box’ approaches which only provide limited benefits to boards.

So how do boards improve diversity and ensure their efforts result in tangible business benefits? The answer lies in providing boards with the tools to correctly identify diversity in a broader context and implement strategies to improve diversity beyond observable characteristics. So what do diverse boardrooms look like?

Key indicators of board diversity

Board diversity is generally identified through observing diversity through three key dimensions: visible core diversity dimensions, less visible core diversity dimensions and secondary diversity dimensions. The Diversity Wheel below describes these differences and accurately portrays factors of diversity which can shape a person’s decision making and thought processes when contributing to boardroom discussions.

Diversity Wheel

Visible core diversity dimensions

These include visible aspects of diversity such as gender, physical and mental ability, age and race and are common indicators of diversity in ‘tick the box’ approaches. Appointing board members based on these factors alone will only improve the appearance of a diverse board and rarely touches upon other diversity dimensions which often impact the performance of boards.

Less visible core diversity dimensions

These include less visible tangible and cognitive aspects of diversity such as socio-economic background, ethnic heritage, sexual orientation, religion and beliefs. By incorporating these dimensions into a diversity plan, boards will begin to experience additional business benefits, but is only realised holistically by incorporating all of the diversity dimensions as illustrated in The Diversity Wheel.

Secondary diversity dimensions

These often include invisible differences of diversity between board members that often require interviews and developing board member profiles that can impact decision making and boardroom interactions. Incorporating these less visible aspects of diversity in boardrooms can help to realise the business benefits of diversity in boardrooms and should be incorporated into any board’s diversification strategy.

Steps to improve diversity on boards

So how do we stimulate actual cultural change around diversity and inclusion on boards? One of the many projects produced by the Emerging Leaders in Governance Program (ELGP) Diversifying Boards: Beyond Tokenism toolkit is designed to assist boards in taking concrete steps to improve diversity and inclusion.

The resource kit recommends the following steps which are included in the scope of the project:

Chapter 1: Use a Board Survey Assessment as a diagnostic tool for measuring the current state of diversity and inclusion.
Chapter 2: Use a Skills Matrix to maximise cognitive diversity via the inclusion of diversity metrics in the assessment.
Chapter 3: Develop a Director Pipeline to enable diverse candidates to establish networks which lead to the boardroom.
Chapter 4: Review metrics to assess the impact and extent of board diversity and inclusion, along with benefits.

To learn more about the project and diversifying boards, visit our resource toolkit here.

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