The spring of 2016 brought another round of reports on the pale state of the U.S. boardroom. It remains a whiter shade of pale, predominantly male.
In its annual review of corporate board appointments, the executive search firm Heidrick & Struggles International Inc. labels the latest crop of Fortune 500 directors “the usual suspects,” noting “stalled progress for women appointees” and “generally flat numbers for directors of Hispanic, African, and Asian descent.” The problem of a lack of diversity in corporate leadership is not just an American one, either. In 2015, the percentage of new female CEOs at the world’s top 2,500 companies was at its lowest since 2011 — a measly 2.8%, notes PwC’s Strategy& in its latest CEO Success Study.
There is no doubt that the forces of sexism and racism are alive and well in the upper echelons of the corporate world. But there’s more going on here than that.
Corporate boards and executive teams are self-regenerating: They largely hire their own replacements. And like all human beings, board members and executives have cognitive biases — blinders that affect how they view the world. So when boards consider the backgrounds, skill sets, and experience that make someone suitable to join their ranks, they tend to look no further than themselves to find the archetype.
To overcome the mighty dose of institutional bias that favors more of the same, we need to get pragmatic: Instead of focusing on the benefits of diversity, let’s fix our attention on the growing risks of uniformity.
I suspect that some of the most pervasive causes of corporate failure can be traced back to the common sets of experiences shared by many boards and executive teams. When business leaders say, “We didn’t see it coming,” after their companies fail to recognize the legitimacy of upstart competitors or customers’ changing tastes, who is the “we”? Our corporate directors and CEOs. In the global economy, the markets a company serves become less predictable and more heterogeneous every day. When too many people at the top are looking at our dynamic world through the same static scope, they are far more likely to miss seeing the full landscape in all of its fast-evolving glory.
We need to improve our organizations’ peripheral vision. That takes people who see things from new angles and through lenses shaped by fundamentally different sets of experiences. It takes people not like us.
The uncertainty that comes with allowing someone into the club who doesn’t look like us or act like us, or who doesn’t check all the boxes our rigid minds tell us need checking, represents a trifling risk when compared to the increasing perils of uniformity. If the moral obligation to diversify your boardroom and executive team doesn’t move you, consider the obligation to your shareholders.
Perhaps this argument sounds familiar. So let’s try something new. Take out a sheet of paper and jot down every reason you can think of to explain why your company’s boardroom and executive suite don’t more accurately reflect the makeup of your workforce or the broader market. Maybe that list will make you a little uncomfortable.
That could be a good thing: Sometimes, the road to wisdom begins with a single cringe.
Paul Michelman is editor in chief of MIT Sloan Management Review.This article republished with permission from MIT Sloan Management Review. For more, visit sloanreview.mit.edu