Diversity Focus Brings Broad Changes to Board Recruiting

A drive to make boardrooms more diverse is challenging companies to rethink whom they recruit to their boards.

The Wall Street Journal | May 28, 2021

The Wall Street Journal article, "Diversity Focus Brings Broad Changes to Board Recruiting​," features a Q&A with Russell Reynolds Associates Consultants Jenna Fisher and Constantine Alexandrakis. The article is excerpted below.

Companies have long recognized the value of board diversity, but heightened attention to social issues has led many to prioritize addressing racial and gender underrepresentation on their boards, says Jenna Fisher, who leads the global corporate officers sector at Russell Reynolds Associates. “The focus on adding more diversity to boardrooms has significantly changed board searches, putting the onus on many companies to think out of the box about whom they recruit, what they recruit for, and how they support new board members,” she says. Fisher and Constantine Alexandrakis, managing director on the Board and CEO Advisory Group at Russell Reynolds Associates, discuss the implications of these recent trends for companies and executives aspiring to board membership.​

How has the heightened attention to diversity and inclusion affected board member searches?​​

Fisher: Diversity has been an important element of board searches for years, but it’s quickly risen to become a key consideration for almost every board search we do now. In the last 12 months, a high percentage of our board placements have been women and historically underrepresented ethnic and racial minorities. That’s especially true of public companies, but it is also increasingly the case in private equity board searches. The impacts on board member recruitment are significant and wide-ranging because of the relatively smaller number of diversity candidates that hold the C-level titles that have historically been recruited in board searches.  Not only do those highly sought-after candidates receive several board recruitment inquiries every week, but many already sit on multiple boards and aren’t interested in joining more. Given the skills-based nature of board searches, companies adding diversity as a key consideration are seeking well qualified talent in other roles beyond those traditionally seen on a board. That means companies focused on making their boards more diverse have to look beyond the core-function C-suite roles to fill new openings and consider senior executives other than the CFO and other C-suite leaders. That emerging trend is an important development for diverse finance executives in particular. This year, I’ve done three board searches that resulted in directorships for a head of investor relations and for chief accounting officers.

How are companies responding to the challenging dynamics of recruiting diverse board members?​​

Alexandrakis: Overall, companies we work with understand the supply and demand issues, but many struggle with how to proceed. Five years ago, most boards would not consider candidates who didn’t hold a C-level title. We’re conducting several board member searches prioritizing diversity, all of which began with fairly narrow criteria for candidate experience and skillsets. Most companies are willing to stretch their thinking on candidate selection criteria, but it’s an education process. It’s about getting them comfortable with outstanding diverse candidates who bring the appropriate skills and experiences, but not always from the traditional C-Suite roles that we’ve historically seen on boards.

When a company comes to us saying, “How can we solve this challenge?” we typically start with a calibration exercise to understand their must-haves and their openness to considering a wider set of roles and experiences.  Then we perform a holistic analysis of the board to understand diversity gaps of all kinds—not just race, gender, and ethnicity but also functional experiences and skillsets. That analysis helps reveal ways that a board heavy on experienced C-suite directors can identify diverse candidates who have skills to add value to the board. For example, some companies have looked beyond the traditional c-suite executives to include candidates with strong digital transformation leadership experience.

Fisher: Equally important is that companies understand the importance of offering more and better support to new board members who may not have th​e experience and seniority the board is accustomed to. Traditionally, on-boarding new members has meant handing them a 500-page binder. Both experienced and less-seasoned recruits would benefit from a more comprehensive support infrastructure to help ensure that they can be successful. For example, we’re commencing a board search for a client that recently brought on a new board member. That individual turned out to be too functionally oriented―not broad enough in terms of strategic thinking―and required significant support to be an effective board director. The client is applying lessons learned from that experience in this new search. Now they’re looking for someone more well-rounded and, at the same time, they are taking steps to ensure the next board member will have the right support from day one.

Q: What steps are companies taking to support incoming board members who are less experienced?

Alexandrakis: It’s an evolution. Some companies pair junior board members with a more experienced board member to provide coaching and mentorship, whi​ch can last from six months to more than a year. At the most sophisticated levels, leading companies will bring in a trusted advisor to provide a new director programmatic onboarding support, as well as individualized development and coaching, for the first year or so to ensure the new director set up for near- and long-term success.

To read the full article, click here.​

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Diversity Focus Brings Broad Changes to Board Recruiting