Best Practices for Board Diversity
On November 18, 2020, The Berkeley Haas Center for Equity, Gender, and Leadership (EGAL), theBoardlist, and Berkeley Haas Development and Alumni Relations hosted a fireside chat on best practices for board diversity. The discussion featured Shannon Gordon, theBoardlist CEO, and Elena Gomez, CFO at Zendesk. Gordon has spent her career building and scaling innovative customer experiences at retail and logistics companies. In her current role, she is focused on building technology that brings access and transparency to the expansive pipeline of board-ready women. Prior to working at Zendesk, Berkeley Haas alumna, Elena Gomez, worked at Salesforce where she helped build their world class finance operation including management of the finance and strategy organization.
One of the most relevant and common topics in boardrooms today is the issue of board diversity. From recent legislation to investor influence to a genuine belief in the value of diverse perspectives in driving performance, every board is considering what diversity means for them. This event discussed the changes in board diversity over the last several years, identified the best practices in diversity recruiting, as well as how boards can foster an environment where diversity can flourish.
The pace of change in recent years has brought massive transformation to the business landscape. Changes in customer demographics and the purchasing power possessed by women and millennials are shaping the future of business. While this news is exciting, Boards and Executive teams can’t seem to keep up. Gordon highlighted the limitations women and underrepresented minorities face as a result of their lack of representation on boards. She argues that the lack of diversity on boards is not solely a problem of demand, but a lack of accessibility where there is demand. Around 96% of board seats are filled via referral and come from homogenous networks. The root issue here, as Gordon states, is that “there is such a tremendous pipeline of incredible talent that is just not getting the opportunities because of the lack of familiarity or connectivity to those networks.” Most recently, the growing demand for change has influenced institutional investors, as well as governments, to mandate diversity on boards. In 2018, California passed a gender quota for California public company boards. Data published by The California’s Partner Project shows that over 665 women will have joined California public company boards by the end of 2021. These remarkable statistics demonstrate promising progress to the future of board representation.
So what can companies do to create diverse boards? Elena Gomez shared the importance of expanding the reach of your network. Creating accessibility to boards means “not limiting it only to CEOs and CFOs” and going further than normal recruiting practices. Gomez emphasized the importance of finding candidates through non-traditional means and tapping into that because,“it’s important to not assume that candidates will come to you, you have to go where the candidates are.” Creating diversity requires initiative and exploring multiple avenues for talent, such as theBoardlist, EGAL, and more. Expanding the board ready network to include individuals in fields such as education, finance, or tech can bring diverse skill sets and additions to any organization. This movement towards further board diversity is far from over, but with these practices, we are one step closer to establishing inclusive and representative boardrooms.