Why Leaders Need to Tackle the Board Diversity Problem
By Latané Conant
When Nike recently appointed CMO of Telemundo, Monica Gil, to its board of directors, it accomplished two goals too many corporate boards fail at: improving demographic diversity and bringing market expertise to the board.
The first goal — diversifying boards — is one we hear a lot about. California has even tried to pass laws mandating diversity on boards. But in spite of the talk about the importance of representation on boards, they remain predominantly white and male. Women hold only 14% of board seats in the United States, and two in five boards don’t have a single woman director. Even on boards that do have female representation, it’s minimal: 58% of women who hold board positions are the only female members of their boards.
Meanwhile, racial diversity is also woefully lacking, with Latinos the most poorly represented of all ethnic groups. In 2020, Latinos held only 4.1% of all Fortune 500 board seats, while whites held 82.5%.
Yet we know that board diversity provides distinct business advantages. According to a report by Deloitte [download PDF], more diverse boards:
- Better understand their customer base and the environment in which they operate (in other words, the market)
- Are less susceptible to “group think”
- Probe more deeply into the issues at hand and consider a wider variety of angles, instead of operating in siloes
- Outperform less-diverse counterparts in terms of return on equity and total return to shareholders
It’s clear that, beyond simply being the right thing to do, seeking out diversity in the boardroom has a concrete and positive impact on how the board delivers value to the company it serves.
Market Expertise: More Needed Than Ever
The second goal I mentioned — bringing market expertise to boards — is less talked about but also critically important for surviving and getting ahead, especially in challenging economic conditions.
“In this economy, somebody has to do the job of creating corporate strategy, understanding how to shape the market to be more favorable to the products you have, shaping product to fit the changing trends,” says Christine Heckart, veteran tech leader and board member.
Especially in this uncertain economy, companies need to be on the offense when it comes to the market, Heckart says. “You need to create and shape the market after the likeness and in the image of the company based on best-in-class capabilities, strategic beliefs, and how those intersect with the interests of the buyer. That intersection is where the market lives.”
The companies that are not doing this find themselves on the defense, fitting their round pegs into the square hole created by the strategic market leadership of their competitors, according to Heckart.
All of these initiatives fit squarely within the purview of Chief Market Officers (CMOs). They’re the ones who own the seat at the table that understands the market, builds differentiated brands through experience, and optimizes revenue generation. Companies with a CMO on the board have a competitive advantage over the companies that do not — which is most companies. In fact, only 26 of the thousands of board members serving Fortune 1000 companies are current marketing professionals.
Why Do So Many Boards Look the Same?
It’s easy to see that the lack of professional and demographic diversity on boards is a problem that needs to be solved. When I ask decision-makers why they’re not adding more women, minorities, and marketers to their boards, they cite scarcity. But I look around at all the brilliant women CMOs from a variety of backgrounds in the communities I’m part of, and I know there’s no shortage of talent to tap into. It’s simply a case of missed connections.
One of the communities I help lead, the Empowered CMO Network, is specifically dedicated to elevating the role of women and CMOs through meaningful connections. So who better to lead the charge to facilitate those connections?
Through a partnership with revenue technology leader 6sense and Athena Alliance, an executive learning community for women leaders, the Empowered CMO network has taken a big step to help introduce those filling board positions to women CMOs who are qualified to fill them. The Athena Alliance provided more than 60 women CMOs with board aspirations hundreds of hours of training and mentorship to help them hit the ground running — with content on everything from funding, to building, to operating and governing a business.
We’ve gathered introductions to these ready, capable women in a downloadable ebook, Empowered CMO Network: The Board Book. Anyone interested in improving both the diversity and the efficacy of the boards they serve will benefit from reading and and sharing this book. Our goal is to remove obstacles to choosing directors who bring both market perspective and demographic diversity to the boardroom.
It will only be with concerted effort and deliberate action that boards get gain more demographic and professional diversity. And this book makes it easy to take the first step toward accomplishing that goal.
Latané Conant is the Chief Market Officer of 6sense and author of the bestselling book, No Forms. No Spam. No Cold Calls. She’s passionate about empowering marketing leaders to confidently lead their teams, company, and industry into the future. Latané is laser-focused on leveraging technology and data to build marketing programs that result in deals, not just leads. She’s known across the industry for her creativity, competitiveness, and boundless energy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.