Over that inspiring fortnight of distraction, the Tokyo Olympics, two new verbs have joined the mainstream, as in ‘I can’t believe we’ve medalled … we were only aiming to podium at the next Games.’
As those verbs have entrenched themselves in the sports lexicon, so ‘diversity’ has become possibly the most discussed, most abused and most poorly understood term in board vocabulary.
Let’s look at diversity in the language of the last few weeks:
- Bronze – demographic diversity
Much of what we read about diversity addresses only one dimension, gender: ‘How many women on your board?’ To be fair, the discussion can extend to other demographic measures, as in ethnicity, age or geography.
Even here, I see this often as a lazy substitute for real diversity. Looking different or coming from another part of the country is no guarantee that you’ll add a different perspective to our board discussions. Indeed, researchers who published a Harvard study in 2017 ran an experiment more than 100 times, and concluded that there was no correlation between demographic diversity and problem solving performance. The ability to solve complex problems, surely, is what we’re aiming for.
Then again, when filling a board position, we want to select from as broad a field as possible. So this type of diversity is still an essential component – for the purpose of inclusiveness and equality of opportunity. We also need to ensure we’re not excluding, or unconsciously discriminating against, particular sectors of our population, as can often result from ‘hiring in the mirror,’ unwittingly preferring people who look or sound like us.
Perhaps, then, demographic diversity is more like the qualifying rounds than gaining a medal: without it you’re not even in the game. But it’s far from enough.
2. Silver – skills, experience and linkages
This next category takes us in the right direction. Having a range of skills and experience at least helps us to ask questions from different angles. Many companies elect their entire board from a similar catchment. For example, an engineering firm may have a range of demographics among its partners – young, old, men and women, but often they’ve all been trained to think the same way: as engineers. Similarly, with the boards of many organisations, such as co-ops, the board may be drawn exclusively from members – farmers, retailers, cab drivers – so again they may not have much breadth of experience or skills.
Another valuable attribute of a well-structured board is directors who bring a wide range of networks, or linkages. Often, in my experience, knowing which influential stakeholder to talk to, or how to tap into a key stakeholder’s thinking, is hugely valuable.
These are areas where independent board members can help to fill the gaps. It’s not about the demographics, but the skills, experience and linkages we need at the board table. It’s an area where I’ve had some wonderful, and challenging, career experiences: the only non-engineer on a board of structural engineers, and the first independent director and only non-farmer on an infant formula co-op’s board, to mention two. As a result, I’ve had the luxury over those years of asking the ‘dumb’ question, such as ‘Why do we do it this way?’ – sometimes the question other directors really wanted to ask, but were too embarrassed, because they thought they should know the answer.
3. Gold – ‘cognitive diversity’
To get what we’re really after, the best group to solve complex problems together, we need what the authors of the Harvard article call ‘cognitive diversity’. I think of this as different ways of thinking about problems. The researchers divide this into two areas:
- Knowledge processing: do our directors apply their existing knowledge to a problem, or prefer to gain new knowledge?
- Perspective: do they apply their own expertise, or build on the expertise and thoughts of others?
Not surprisingly, boards with the highest levels of ‘cognitive diversity’ scored best at solving complex problems – regardless of whether they were socially, ethnically and gender diverse, or all young Hispanic women … or even pale, middle-aged and male.
The answer seems obvious: appoint cognitively diverse members to your board. The reality is more difficult: how can you tell? You can’t see cognitive diversity; also, because people generally like to fit in, they tend to be cautious about standing out as different, especially when we first meet them, as in an interview.
Here’s the challenge for our board chairs: we often talk about authenticity in our own leadership. Perhaps even more important is to celebrate the differences, to encourage everyone at the board table to be themselves and, like the late Mr Sinatra, to do it their way.
When we genuinely bring together a range of problem-solving styles, where people are comfortable expressing different views resulting from different thinking styles, challenging long-held assumptions, and asking questions that make us all think … then perhaps we can stand at the top of that diversity podium.
And, as chairs, we’ll be able to claim our own ‘PB’!
 I won’t forget my introduction to the Dairy Goat Co-op. At the AGM where I’d been nominated, one of our farmers asked me, ‘So, Mr Westlake, what do you know about goat farming?’ We both knew the answer.
Perhaps, I said, my total lack of knowledge was the most valuable thing I brought: the other six directors knew everything they needed to. I hoped, though, that I’d bring some other skills and experience from my non-farming, background.
The other shareholders seemed to agree and elected me as the company’s first independent director.
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