By the Nasdaq Center for Board Excellence DE&I Insights Council: Jocelyn Mangan, Joanne Pedone, Lisa Roberts, Cid Wilson, and Ilana Wolfe
As boards widen the scope of skillsets and perspectives needed to future-proof their companies, they often face the reality that the addition of individuals with differing backgrounds alters group dynamics. In these circumstances, how can a company ensure the board works well together while welcoming new members with different experiences and expertise? Based on insights from CEOs and a board member at Sonos and Zoom, two companies that value diversity and inclusion in the workplace, we identified best practices for finding and welcoming first-time board members with diverse backgrounds and ensuring that they hit the ground running.
1. Get buy-in from the board
To build consensus among board members on the purpose of board diversity initiatives, focus on advising the board about why it is important to the business. For example, Sonos educated its board on the importance of diversity in driving business results. Patrick Spence, CEO of Sonos, noted, “I strongly believed increasing the diversity would enable us to build products that serve a wider variety of people. We leveraged some of the work from McKinsey and others that has been done in this space to underscore its importance and bring them along.”
Zoom subscribes to a similar philosophy of the value of board diversity. “Zoom was founded on the core value of care. Caring for our diverse base of employees, customers, and communities requires that same diversity to be reflected through all levels of the company—including in the boardroom,” said Eric S. Yuan, CEO of Zoom.
2. Onboard for success
Boards can take a variety of steps to teach the culture of the boardroom to new directors. One suggested action is to appoint existing directors to act as a mentor for new directors—a practice already in place at Zoom. According to Janet Napolitano, Former Secretary of Homeland Security and Board Member of Zoom, the company also “arranged a comprehensive series of meetings with different leaders throughout the company to help me understand the company’s organization and various functions.” She found that a lengthy session on how financial information was presented to the board was most useful.
Joanna Coles, Board Member of Sonos, Snap, The Original Bark Company, and Density, explained that for established boards, it may be useful for new directors to talk to other board members and the executive leadership team, while for new boards, it may be useful to understand the skills and strengths of the other board members and where one can be useful. Moreover, for boards with newly appointed members from underrepresented communities, Joanna Coles advised that they onboard two candidates together. She shared, “This is very effective and takes the attention from the diversity, giving them support with each other to ensure they aren’t talked over.”
3. Create space for new perspectives
First-time board members may struggle to find their voice in the boardroom. One way to help create space for those unfamiliar with the boardroom is by seeking their input on topics where they bring expertise, as well as making sure everyone knows where they can contribute. “There’s a degree of check-ins with each board member on a regular basis to make sure they are onboarding and feeling comfortable with their position,” shared Patrick Spence. Janet Napolitano concurred with that approach and noted, “I have found one-on-one feedback conversations more helpful than surveys.”
It is important for board members to remember that they are onboarded for their business experience and expertise. “The point of having a wide group of people on a board is to get all points of view on everything from the balance sheet to long-term strategic plan[s]. Diverse members will want to contribute around their skillset, not exclusively their diverse identities,” according to Joanna Cole.
4. Find opportunities for diverse board members to benefit other areas of the company
One recommendation to deepen engagement among new or diverse board members is through support of Employee Resource Groups and mentorship programs for the company’s rising talent. At Sonos, mentoring has been a benefit in addition to the contributions of the board members in the boardroom and as strategic advisors to the CEO. Board diversity has given Sonos an edge in the labor market, according to Patrick Spence. He shared, “I felt strongly that building a diverse board would enable us to attract the best talent to Sonos at all levels of the organization, and this has proven true. Most of our candidates look at the makeup of our Board and Executive Team to see if we’ve put our money where our mouth is.”
5. Build a pipeline for diverse board talent
So, how are companies tapping into networks to build a pipeline of board candidates with diverse backgrounds? Getting people to think about diversity may help them be more thoughtful about the board search process in general. Patrick Spence explained, “In the past, you’d often see searches that largely tapped into existing networks of existing board members, and filling many with typical ex-C-level people, or people from other boards.” He also noted that he’s “seen most companies get much more thoughtful about the competencies, perspectives and dynamics they need from a mix of board members.”
To this end, consider looking for board talent in different places to expand the search. One idea is to “Ask prominent members of diverse groups for help, as they field requests all the time and have their own networks different to your own,” according to Joanna Coles. Another idea is to look internationally, which has been made easier with technology like Zoom. Boards may also work with organizations or search firms that specialize in finding diverse candidates.
With a board attuned to different experiences, companies may look forward to improved “problem-solving.” Different, broader perspectives at the table help boards and management teams see more angles on different problems and, in turn, may afford better solutions. Eric Yuan noted, “Diversity of perspectives in the boardroom is critical to ensuring we are making decisions and setting our strategy in a way that will help us attract the best talent and better serve our customers and communities by building products that deliver happiness to a wide variety of people and meet their needs.”
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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