“Newer demands, not just from the C-suite but from shareholders and the general public, along with social justice movements such as BLM, have caused corporate America to become more active in improving racial diversity within their own ranks,” said Mark Rogers, founder and CEO of BoardProspects.
Currently, about 4.1 percent of Board seats in Russell 3000 Index companies are held by Black board members, a figure dramatically out of line with the population; and 160 of the S&P 500 lacks a single Black board member. Competition for highly-qualified diverse candidates is heating up though, and in just the past two months alone there have been 12 Black board members have been appointed to Fortune 500 firms.
In some states, most notably California, legislation has been passed or is under consideration to require diversity among the biggest companies. Shareholder derivative lawsuits filed against board members, alleging a breach of fiduciary duties by failing to ensure diverse board candidates, are also becoming more common.
“One of the greatest benefits of BoardProspects is that it completely changes the traditionally slow, insular, and very expensive way corporations choose their boards,” said Rogers. “Traditionally orchestrated by third-party recruiting firms and frankly, a process dominated by insiders, BoardProspects allows corporations to adopt a new model, searching directly through a prestigious and credentialed community of thousands of board candidates using a variety of search filters, including race.” With the largest community of highly-credentialed Black board candidates in the world, including current Black C-suite executives from America’s most prominent corporations, BoardProspects allows companies to take a proactive stance on building a more diverse board.
In a recent Harvard Business Review article, it was found that Board-level diversity brings unique perspectives to the company while enhancing overall performance of the company. In addition, a McKinsey study showed that executive teams with the highest levels of ethnic and cultural diversity consistently performed better.
“There is a strong business case for inclusion and diversity at the Board level,” said Rogers, “as companies with higher levels of Board diversity consistently outperform those without gender, ethnic and cultural diversity.” Corporate boards throughout America are changing, and fast. Already the Business Roundtable issued new guidance on the purpose of a corporation, moving away from the outdated model of shareholder primacy to one that promotes “an economy that serves all Americans”. BoardProspects.com has taken a leading role in defining how corporations respond to this new model by starting with a more diverse Board.
BoardProspects.com is an innovative software platform designed to help corporations cost-effectively identify, assess and recruit world class board members from its community of thousands of highly credentialed board candidates. The BoardProspects platform leverages technology to improve the board recruitment process for publicly traded and private corporations by providing the tools and features necessary to create and maintain a diverse and talented board succession pipeline.
SOURCE BoardProspects, Inc.