& How Can Universities Help Do Their Part?
Boardrooms are becoming more diverse, and universities can play a role in this. Over the past year, public companies have added the most diverse group of new directors ever, according to two new studies. Ethnic and racial minorities accounted for 47% of new directors compared to 22% the previous year, according to a study by executive search firm Spencer Stuart.
Of the 456 new independent directors added to the boardrooms of companies listed on the S&P 500 this past year, nearly three-quarters (72%) were either women or people of color, according to a report released Wednesday by Spencer Stuart, an executive recruiting and leadership consulting firm that has been collecting data on board diversity for over 30 years.
Broken down further, a record 47% of new independent directors were Black, Asian or Latino. Compared to 22% the prior year and 14% a decade ago, the study found.
The data means major companies tripled the number of new directors who are Black (comprising 33% of new directors, compared to 11% last year). Doubled the number who are Latino (making up 7% of new directors, compared to 3% last year).
Why is board diversity important?
Considering how the board’s role is evolving as the world continues to change rapidly, it’s a good idea for companies to get ahead of the curve. They must look at their boards’ membership now and make changes. These changes show they have a real commitment to diversity, equity, and inclusion.
As the world and economy continue to change, so too must boards and overall corporate governance. With the world changing at a faster pace there is the need for different kinds of board expertise. This is due to an evolving workplace and workforce. There’s never been a better time to think about boardrooms.
A diverse board can be a competitive advantage and make a company stronger over time. There are additional benefits to name a few:
- A diverse board can bring diverse knowledge and viewpoints
- A more inclusive company culture
- A broader view of risk management
- An enhanced brand and business reputation by aligning a company’s values with their actions
Why is it important to take action in boardrooms becoming more diverse?
There are significant costs to not taking action. A company without diverse management will appear increasingly out of touch with consumers’ beliefs and behaviors. It can face issues with everything from attracting talent to selling products. Employees look for a company that reflects their values. Consumers show a preference for companies that stand up for broader societal issues.
It’s time for companies to take a visible and public stance and appoint board members that reflect today’s world.
Building diverse boards requires a novel approach to board recruitment. Boards look the way they do today because new directors are typically tapped from the personal networks of those already in the boardroom. Because our personal networks tend to look like we do, this practice creates a self-reinforcing cycle that inadvertently excludes women and people of color. As a result, business leaders literally cannot see the wealth of talent that lies beyond the peripheral vision of their existing relationships.
How are Business Schools Affected?
What can universities do to help boardrooms become more diverse?
According to the Women in the Workplace Study 2020, if companies don’t step up their efforts to improve diversity, they risk setting progress back fifty years. This applies to the broader business landscape, including business schools and universities. Business schools have been making a concerted effort to attract female candidates. As a result, nearly two-thirds of global business programmes have seen an increase in female applicants. This increase will hopefully then lead to a similar increase in the number of women represented in businesses at executive level.
The Graduate Management Admissions Council (GMAC) recommends instigating connections between female candidates and current students and alumni. By creating a supportive network, perhaps led by bodies such as the Student Council, candidates will be able to get a ‘real’ sense of the experiences of their fellow students. This approach can be especially valuable to women from the LGBTQ+ community, Black women, and women of color.
Building Global Leaders of Tomorrow
UBIS, as a global university, celebrates the diversity of its students, faculty, and staff from all continents of the world. UBIS is a woman-owned university. We want to ensure our students flourish during their time with us and go on to successful career paths. We strive daily as an organization to graduate and train top quality students to help contribute to boardrooms becoming more diverse. As our CEO Cathleen Raffaeli recently said, ‘education is the key to thriving communities, healthy families, personal empowerment and self-determination’.
We are working to support our students with flexible learning options, world class teaching from a wide variety of male and female business and academic experts and opportunities for real-life, practical business experience!
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