September 27, 2013 — One of the advantages of attending a small college is that there is a real sense of community. As a freshman (and a foreign student two thousand miles away from home in a small US town), I frequently had casual discussions and sometimes even lunch with the president of my college. For me, that president happened to be former governor of Kentucky, Martha Layne Collins. Those inspiring conversations on leadership, the importance of bold decision-making, navigating cultural nuances in business, and her experiences as a corporate director, initially piqued and fed my interest in corporate governance and leadership.
Since 1998 I have been involved in one way or another with issues related to corporate board diversity and the inclusion of women and minorities in leadership positions and boardrooms. Most recently I helped put together the new report Missing Pieces: Women and Minorities on Fortune 500 Boards, which was published by the Alliance for Board Diversity (ABD), a collaboration of four leadership organizations: Catalyst, the Executive Leadership Council (ELC), the Hispanic Association on Corporate Responsibility (HACR), and the Leadership Education for Asian Pacifics (LEAP). (The Prout Group Inc., an executive search firm, is a founding partner of ABD and also serves as advisor and facilitator.)
The picture has certainly changed in the last 20 or so years. The good news: inclusion of women and minorities has increased from those early days. The bad news: the rate at which this is happening is painfully slow, and minority women are particularly underrepresented. According to the ABD report, in 2012 Asian American women directors held a mere 0.5% of total board seats in the Fortune 500. Hispanic women represented 0.8% and African American women held only 1.9% of Fortune 500 board seats. Our research indicates that obstacles to board service are amplified by the combination of gender and race/ethnicity biases.
Let’s focus our attention on the opportunities ahead. There is an undeniable demographic shift occurring right before our eyes. The American economy increasingly will depend on women and minority groups, particularly Hispanic and Asian-American populations, which are currently growing at a fast pace, while economies around the world are experiencing increasing demands for the workforce participation of women and immigrant groups. Globalization is bringing the world closer together, making us more interdependent than ever, and creating a need for us to find ways to successfully conduct business around the world. At Catalyst, we say, “Think global, act local.”
Diversity on corporate boards is a key factor in achieving sustainable growth and competitiveness. As our work suggests, leaders of diverse backgrounds bring different and fresh perspectives, foster innovation and creativity, and ensure independence of thought—an increasingly crucial characteristic of good governance in our ever-changing world.