Brutally Honest Conversation about Board Diversity with Board Members
This week I had two interesting conversations that with current board members about:
- Board Diversity
- Value of a highly functional board of directors
The board diversity conversation happened ironically after a board meeting that I attended. One of the company executives that was in attendance at the board meeting also joined us for lunch after the meeting was over. During lunch the discussion turned to the bank board he serves as Chairman on. A comment was made by Rick (Chairman of the bank) made the statement the he took my advice. It always surprises me when someone says this in a public setting. I asked what advice was that? He said that I told him that he needs to look at the board and ask if it accurately reflects the bank’s customer. More importantly, does the board accurately represent the bank’s stakeholders (customers, suppliers, employees, shareholders and community). Rick announced to the group that he is going to add two new board members and there is going to be at least on woman because at least 50% of the customers are women. Point well taken. I mentioned that I was meeting a recently retired woman bank CEO and would he be interested in talking to her and his response was ABSOLUTELY. At that point in time another board member who is on the board of a different bank was also interested.
What strikes me as the message is starting to get accepted was just three weeks ago I met with a CFO of a public company that says the problem with diversity on the board is finding quality people. This is so untrue. The real truth is that most board members just don’t know qualified people and are uncomfortable taking the risk beyond their own network.
My second interesting conversation was a recent meeting with a mid-size business owner for lunch. He asked me for advice on how to get his management team assessed and to get a plan to have them take their game to a new level by doing 20% additional business with using the existing staff and infrastructure. He is concerned that his management team will struggle with making the stretch.
Underneath it all is the issue he feels that the only way to get the increased productivity is for him to personally prop up and motivate the team.
When asked if his board supports his initiatives he said that they only meet once a year and really it is meant to report the results and not help with strategy regarding the business and executive team. After further discussion he made a comment that he is on the board of a company whose founder died and he has been very active in helping the business turnaround and flourish. His comment was “I feel that I have had a bigger impact on that company than my own and I know nothing about their industry.”
That is when the AHA moment came. I suggested that he have quarterly board meetings and report on the past, present and future, plus have his management team present and get real independent directors, not just his friends on the board. That is his new strategy for growth.