Board diversity has been one of the most discussed topics of 2019. Diversity alone though won’t deliver on the promise of uncovering potential opportunities and risks to an organization.
To spark that kind of open discussion, every board member needs to be invited to speak up. Creating an inclusive board is the next step in progressive board governance.
To explore the role of inclusivity in board governance and performance, Aprio invited board director and chair, Isabel Meharry, FCPA FCA, MBA, Cdir, ACC, to share her perspective. Here are highlights from that conversation.
As boards strive to become more diverse, and the search for candidates is broadened beyond personal networks, new directors often don’t have existing relationships within the group. As we make strides in diversity, we need to step up efforts to connect new board members, make them feel comfortable, and unite them around a shared mission.
Organizations spend a lot of time and money on selection and education of board members. Board recruits are usually selected for either their functional expertise or their industry knowledge. These carefully selected board members have the ability to add considerable value to the organization. However, the potential contribution of each board member will only be realized if new members are fully engaged. Only with an inclusive culture will it be possible to draw out an authentic view point from every board member. If your board is successful at engaging diverse members, more perspectives will be heard, and there will be more open discussions of sensitive topics, which should result in improved board decisions.
Strong boards are built on strong relationships. In the past, boards often relied on their personal networks to find new board members. As a result, new board members often joined the board with established relationships with existing board members. This is often not the case when diverse board members are selected.
Inclusion doesn’t just happen – building strong relationships takes effort. The board chair and the committee chairs have a leadership role to play. Meetings need to be facilitated in a manner that fosters an inclusive culture. The board chair should also arrange board member orientations and social events so that new board members can get up to speed on issues and build relationships with other members. Planning sessions should be held to ensure that all board members understand and are aligned with the strategy of the organization.
Orientation for new directors is an important building block for inclusion. Every board member needs to understand and embrace the organization’s mission and be committed to its achievement. New members need to hear that their unique perspectives are welcomed, and that their diverse viewpoints will contribute to making the best board decisions.
So how do you create an inclusive board?
First, board packages must be sent out early enough so that all members have adequate time to review them. The meeting agendas and board materials must be thorough, and clearly lay out the issues to be discussed. Good meeting material practices will ensure that every board member has sufficient time and background information for considered thought.
Secondly, boards need to ensure that all members are comfortable. The boardroom needs to be an open and safe environment, where new ideas are welcomed. It’s important that the chair invites everyone to contribute to the discussion, and that all members really listen to what other members have to say. Observe members attentively, and encourage creative, innovative suggestions. There can be no eye rolling or other discouraging gestures.
If there is a difficult decision to be made and there does not appear to be consensus, the board chair can say, “Let’s go around the table and hear everyone’s thoughts.” If a board chair doesn’t do that, a director can contribute to an inclusive culture, by saying, “Before I vote on this, I would find it helpful if we went around the table and heard everyone’s perspective.”
Sometimes a board member will be offside but won’t express their true concern. For example, I was at a board meeting where we were reviewing whether this was the right time to take the company public. The recommendation not to go public at this time was solid and clearly set out, yet one board member disagreed.
This board member’s position didn’t make sense, so I was trying to determine the real issue. I concluded that the objecting board member probably wanted or needed to cash out. So, I respectfully asked, “Could it be that the difference in perspectives is because so much of your wealth is tied up in this business, and even though it’s not a great time to go public, you want to get some of your cash out?” Immediately he said, “Yes, that’s the problem.” Once we understood the issue, the board found another way to cash this board member out. It didn’t take much to figure out the real problem, and all board members probably had the same thought, but it did take courage to speak up and address the elephant in the room.
Bottom line with meetings: observe whether the whole group is participating, and if not, respectfully draw out diverse perspectives and try to really understand the differences. If you understand the tensions (i.e. the areas of difference), you may be able to find a solution that is superior to any of the ideas that have been presented so far. Be creative and resourceful – present alternatives or modifications that can align all board members and achieve a consensus decision.
While much of the board inclusion discussion is around formal structures such as developing a diversity and inclusion policy and the role of the chair and board leaders, in fact every director can make a difference. Every one of us plays a role, and we will have opportunities to be inclusive or not, both when we speak up, and when we don’t.
We each need to step up and behave in a way that contributes to an inclusive board culture. For example, speak up if you observe another member’s voice being ignored. I have seen board conversations where a woman, I’ll call her Jane, offered a perspective. Then another board member, who is a long-term associate of the board chair, let’s call him Joe, reiterates Jane’s idea in different words. The Chair comments that Joe’s idea is brilliant. That’s where I say, “I also agree with the approach that Jane identified and I appreciate Joe’s eloquent elaboration of the concept.”
Ensure you hear the perspectives of diverse members. I sit on a board where I am the only woman, and if there is an important issue being discussed and I have not yet spoken, there is one board member who always says something like, “I am keen to hear Isabel’s thoughts.”
Only take on a board role if you have the courage to say what needs to be said for the betterment of the organization. Ask yourself – will you speak up, and always do the right things for the right reasons? If not, don’t take the role.
Good policies, board technology, and diverse recruitment alone don’t make boards inclusive, but they are important supports. Board policies help set the tone for the board to prioritize diversity and behave with inclusivity.
It is vital for inclusion that board information gets to every member in a timely way.
Board technology can level the playing field by providing equal access. Boards need easy-to-use tools that empower everyone to prepare for meetings and participate in decisions, including online votes. Some boards use online note taking and discussions to support collaboration and relationships between board meetings.
Thoughtful recruitment and board composition are also important for inclusion. I have joined several boards that previously had no women members. These boards wanted gender diversity but they realized inviting only one woman could be isolating for the individual, so they set out to recruit two to three women board members. Boards need to consider how board composition will impact different voices feeling supported.
When I get asked, “How can our board assess whether we are inclusive?” my advice is simple – ask two things:
“Does every board member participate?” If every board member is engaged – probably they feel comfortable and believe their contribution is valued.
“Do board members ask tough, out-of-the-box questions?” This likely indicates that the board is high functioning and providing excellent strategic direction.
It’s also reasonable that from time to time, a board member will be an outlier. With independent thinkers, it’s not always possible to reach consensus, and sometimes they cast a lone vote.
Most boards are still moving towards inclusion. I encourage you to track progress in your board evaluations. Ask members, “Do you feel comfortable and included on the board? Do you feel encouraged to provide your different perspective? Have you felt heard and influential as a contributor to board decisions?”
Inclusion is mostly about behaviour, so it’s always a work in progress – keep striving to engage and actively listen to every member of your board. It’s worth the effort, as diverse, inclusive boards are less prone to groupthink, are often more innovative, and have a better understanding of opportunities and risks.
Ms. Meharry is a performance-driven senior executive and board member with extensive global experience in operations, marketing, business development, investments, and corporate finance. On public and private sector boards, Ms. Meharry has expertise in financial reporting, audit, risk management, and corporate governance. She is an integrative thinker, known for helping boards to operate with inclusion and reach consensus decisions. She has been on the faculty of Director’s College since its inception.
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