There is a battle royale playing out in boardrooms across the globe. These predominantly male domains are choosing whether to join the push for quotas (like the 30 Percent Club) or stick by the meritocracy argument (the best candidate gets the job).
First, let’s break down the meritocracy argument. At face value it’s very compelling. Who wouldn’t want to choose the best person to be on your board? You get together as a board, work out where you have need and gaps in knowledge, experience, expertise and so on, then go into the wide candidate market to find the best candidate. Simple.
However, it doesn’t often happen that way. Many boards like to recruit in their own image. It’s comfortable. It’s (supposedly) risk free - “people like us are a known quantity”. It’s understandable; diversity is hard to manage because unless you have a strong culture of open dialogue then it can turn into a mess of arguments instead of constructive debates or actual decision-making. No, far easier to just tap my good ol’ executive friend on the shoulder and get them on board.
Also, when it comes to current directors, research by PwC reveals that two-thirds of male directors do not see gender diversity as important (75% when considering racial diversity) despite increasing evidence of the benefits.
Beyond gender and race there are other types of diversity; age for example - a particular passion of mine. Many boards do not trust that younger directors (say under 45) have enough “experience” to be on a board. If you define experience by time alone then perhaps this is true. What they these next generation directors do have is a different perspective, most likely good problem solving skills; plus they are likely digital natives having grown up with mobile devices, social media and the internet rather than rotary telephones, newspapers and the Yellow Pages.
"You need to bash them over the head with the stick before they start to see the carrot”
During our research, we found that many directors (not enough to call it an epidemic) see it as too risky to recruit younger directors. However, the better boards see it as risky not having that level of diversity in this ever-changing world of ours. They cannot understand why you wouldn’t want a few younger directors who have a natural affinity with change and the largest part of the workforce.
Therefore, meritocracy is a very strong argument, but only if you have the appetite for searching outside your network, industry, generation or culture. Hmmm, probably means you have a diverse board already.
So what about quotas?
The argument against is you might not get the best candidate, but we’ve just dumped a whole pile of BS on that one. Also, if you believe the views of two-thirds of male directors (and a third of female directors) you need to bash them over the head with the stick before they start to see the carrot.
(For those who cannot visualise that metaphor, the stick is quotas and the carrot are the benefits of diversity; better governance, decision-making and ultimately, performance.)
Obviously meritocracy comes into play within the quota system but for now I firmly believe in quotas first at all levels, until such time as all boards have the vision to see beyond their own image when recruiting directors.
Thanks for reading,