We’ve all heard how valuable diversity is to company success. We’ve even seen some traction in diversity of executives within an organization, but boards have been slower to catch up. Legislation is quickly changing this, however, and companies are starting to focus more on board diversity. California, specifically passed a law in 2018 that requires greater diversity on corporate boards - this new law requires boards of public companies with a primary office in California to have at least two female directors. Additionally, a second law passed in 2020, requires boards to have one or more directors from an “underrepresented community,” which includes people of several races and ethnic groups and people who identify as gay, lesbian, bisexual or transgender. Following California’s lead, other states have introduced legislation that would require boards to have a certain number of women. We’re seeing impact from these legislative changes - according to a 2021 study from ISS Solutions, Directors from underrepresented groups increased 3% in 2020, and women, of all races, have also made gains, now accounting for 27 percent of all directors in 2021, up from 24 percent in 2020. Corporate Social Responsibility is top of mind and gaining more and more traction so we expect that companies will be focusing on board diversity more and more in the coming years, which is extremely encouraging.
I recently became an advisor for Black Women on Boards, a great organization with the goal of increasing the representation of Black Women on Boards. We know there's an opportunity to increase the number of Black Women on public boards, and to go even further to include opportunities on private boards as well, to ingrain a focus on diversity and to create opportunities for diverse talent, from the earliest days of a companies development. Through this partnership with BWOB, I started thinking more and more about what traditionally underrepresented groups actually value when considering board seats.
From that, Felicis Ventures and theBoardlist recently surveyed 200 diverse executives—women and men of color— about what they look for before signing on the dotted line. We hope to provide a competitive edge for companies who are interested in learning more about the attitudes, actions, and values that diverse candidates prioritize before joining. You can learn more here.
I think my biggest takeaway is that it’s never too early to prioritize diversity on boards.
(Huge thanks to Megan Wang and the team at theBoardlist for helping to bring this to life).