What is preventing diversity at board level?

Organisations are just not trying hard enough to recruit a diverse mix of people at board level. HR needs to switch off the spotlight and turn on the floodlights to find new talent, says Fiona Hathorn

Boards of listed companies are small – on average only 10 people – and the potential candidates far outnumber the seats that become available each year, meaning nominations committees and HR specialists sometimes haven’t felt the need to even advertise these elite non-executive directorship (NED) positions. Add to this the fact that everyone feels “more comfortable” with people they know and you have a recipe for the incestuous cross-holding of board seats.

Women on Boards UK is calling for full transparency around NED appointments, and transparency means advertising vacancies. Recruiters (and the headhunters they use) say that they agree with open transparent processes, but in reality, FTSE board positions are rarely advertised.

Most recruiters are fishing in the same C-suite pond, searching for the obvious candidates that are the easy, low-risk sell to boards. But I agree with Robert Swannell, the current chair of Marks & Spencer, who recently said at a conference that lively discussions are needed in boardrooms to keep executives on their toes. He brought into his boardroom Martha Lane-Fox, one of the founders of LastMinute.com – even though Martha had not previously had FTSE-level board experience.

My challenge to headhunters is simple: turn off the spotlight and turn on the floodlights when recruiting board members.

But why change and how?

Advertising board roles transparently will create a deeper pool of diverse talent and ensure that more of the ‘quiet achievers’ who aren’t known to today’s board incumbents have the opportunity to compete for roles. However, a few changes will be needed to the typical candidate brief to make this successful. In particular, the following common prerequisites will have to be done away with:

• People who have done it before. If we want to enlarge the pool of board candidates then this requirement has to be struck off, at least where ‘it’ means sat on a listed board. As the numbers show, the vast majority of past members are white males.
• Candidates that are known to the board. If we want new and diverse candidates, then boards will need to take a risk on people they can’t reference directly from within their networks.
• Talent with C-suite experience. With men filling 95 per cent of the top executive roles in the listed sector, ‘ready to step-up from the C-suite’ can no longer be a mandatory requirement to join the board.

It is the fear of the unknown that forces boards and headhunters to recruit ‘the known’.

PwC have won awards for their ‘Opening Minds’ and ‘Unconscious Bias’ programmes which encourage business unit team heads to think out of the box, understand the business benefits of diversity and be ready for change while they innovate. Good organisations today realise that you don't need to understand everyone in your team – or even like them – to get the benefits of their difference.

Organisations used to claim that it was expensive to advertise for NED posts, but thanks to technology, that excuse no longer holds true. There are several NED websites, including Women on Boards’ own website, which do not charge for advertising roles to their membership group.

Headhunters and recruiters, over to you.

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