We have been tracking changing representation on boards for 20 years. This year, we sought more insight as to whether diversity and inclusion are important topics to boards and why. We reached out to 450 global public board members and asked them a series of questions about the desirability and effectiveness of diversified representation and inclusion on boards. The overwhelming majority of our respondents underscored these as important current business practices:
- 94% of board directors say embracing different viewpoints is a strategic priority for their boards
- 90% agree it leads to better decision-making
This is especially striking given the environment boards are operating in today. Complex challenges from geopolitics to AI, to cybersecurity to sustainability are changing the demands and pressures on boards. New topics vie for attention on the agendas, all while board members are also expected to engage more deeply in strategy, investments and M&A, performance management, risk, and talent.
To bring more perspectives into the boardroom, most boards in our survey have broadened the range of director representation and are including younger directors, functional leaders, outside industry executives, and directors from under-represented ethnicity, race, or gender. Perhaps unsurprisingly, several respondents underscored the need for more IT/technology representation at this moment in time. Overall, as one director noted: “Smart people quickly learn to respect other smart people with different approaches and views.”
Board members say that the main challenges in increasing representation have been creating space on the board and finding directors with the right level of experience. Several respondents expressed frustration about a narrow pool of talent and others say that many candidates who meet the experience requirements are over-boarded. Boards are also reluctant to utilize tenure limits, whether by age or years of service. Generally, there seems to be a need for careful pacing of transitions and succession to offboard and onboard smoothly and not to lose continuity and expertise.
In addition, a wider array of voices on the board means extra attention needs to be devoted to board dynamics and culture to ensure inclusion of all perspectives. We asked our respondents several questions about where they are on this journey and found another consensus: 97% of directors say that all perspectives are heard on their boards and are making adjustments accordingly when they’re not. Board members also say they value healthy disagreement over uniformity.
Creating a culture of candid exchange without fear of repercussion or conflict is a must for effective boards.
Board Study Respondent
Board members were also clear that progress on all these fronts largely depends on a strong and inclusive Chair. “A strong Chairman/Chairwoman must show the way and facilitate transparent but respectful discussion” is a sentiment they shared repeatedly. Overall, the role and personality of the Chair is understood as the key element in ensuring proper dialogue and a culture of trust among the board members.
To take a closer look at what inclusion means in boardrooms today, we surveyed 450 directors globally (44% from EMEA, 29% from the US 16% from APAC, 11% from the rest of the Americas), the majority of whom are experienced, independent directors who serve on two or more boards. The findings are clear and instructive: there is no question that boards are committed to broadening representation and enhancing inclusion as core elements of their culture and decision-making processes.
