Industry leaders and activists came together last month n New York City to discuss ways to keep companies competitive.
The event, moderated by Ann Bartel, the Merrill Lynch Professor of Workforce Transformation at Columbia University, brought to light some surprising facts: despite numerous studies linking improved corporate and shareholder performance with a firm’s diverse board, most Fortune 500 companies continue to lack true boardroom diversity.
While women represent 51 percent of the US population and African Americans, Asian Americans, and Hispanics together represent 34 percent, only 28 percent of board seats are held by women and minorities.
Three panelists presented the business case for diversity: Ilene H. Lang, president and CEO of Catalyst and founding CEO of Alta Vista; Monika Mantilla ’96, president and CEO of Altura Capital; and Carlos Orta, president and CEO of the Hispanic Association on Corporate Responsibility. Catalyst and the Hispanic Association on Corporate Responsibility create resources to assist corporations in finding and promoting qualified and diverse board candidates. Altura Capital helps institutional investors find new investment prospects among companies with emerging, diverse leaders.
The three panelists offered three reasons corporate boards should diversify.
First, the business case: research suggests that better decision-making occurs with more diverse groups, and diversity is correlated with better financial performance.
Second, the talent pool: women now earn more than half of all professional degrees, Lang explained, and changing customer demographics makes diversity more crucial than ever.
The third factor, Lang said, is reputation: research indicates that companies with more women are perceived as more ethical; leadership demographics that reflect customers is viewed positively, too. However, a supportive atmosphere for one group doesn’t necessarily mean the same for another minority. “Companies that are great for women may not be great for Latinos, for instance,” Orta said.“If you want the best and brightest talent for the next 20 to 30 years, this is what it’s going to look like,” Lang said. “And if women and minorities are the future of your customer base, you need leaders who understand those customers.”
“I believe we are changing the world,” she said. “It is revolutionary to live in a system that works for all.”
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