Dr Juliet Bourke GAICD is chair of the NSW Parliamentary Advisory Group on Bullying, Sexual Harassment and Serious Misconduct, an adviser, non-executive director and Professor of Practice at the School of Management and Governance at UNSW Business School. Her book, Which Two Heads are Better than One? (second edition), explains how board members can deliver breakthrough thinking and make smarter collective decisions.
1. Diversity of thinking boosts buy-in and cuts risk
A greater amount of diversity of thinking at board level can deliver an increased capability to cut risk and make more innovative strategy decisions. That’s not to say boards don’t currently make innovative decisions and don’t spot risk. But they can do so at a higher level, lifting organisational performance.
Boards could also get a greater level of followership of decisions if they take diversity of thinking into account, because they will be speaking in the language of a broader set of stakeholders. It’s not just about making better decisions. It’s also about communicating and getting alignment behind that decision.
2. Put a “people” lens on every decision
Decision-making and how a board solves problems is reflected in the composition of the board. My research reveals there are six ways people think about problem-solving, but tend to use one or two rather than all six equally. Some people dominantly solve problems by applying an outcomes lens: What are we trying to achieve? Others an options lens: How else could we do this? Or an evidence lens: What’s the data we’re using to evaluate the decision? A risk lens: What could go wrong? How do we mitigate those scenarios? A process lens: How are we going to make this happen in practice? Or a people lens: Who are the stakeholders? Do staff have the right capabilities?
Boards have traditionally focused on finance, governance and operations, which often play into outcomes, options, evidence, risk and process perspectives. It’s obvious that a strong people perspective is a gap. Fewer people on boards have a “people” background — with customer, marketing and human capital skill sets — who can draw that focus onto every board decision.
3. Let each perspective be heard
Every decision we make on a board needs us to think about outcomes, options, evidence, risk, process and people. The chair must lead the group in an inclusive way. Is the chair enabling all of those different perspectives at the table to be heard in equal measure? If the board is stacked with people who come from a single discipline, or if the members think in a similar way, the conversation will be monopolised by that perspective and become an echo chamber.
It’s up to the chair to make sure there’s an equal distribution of perspectives. If one of the problem-solving perspectives isn’t in the room, then maybe bring in someone who can speak from that perspective.
4. Board member behaviours must maximise group potential
Boards can sometimes find themselves falling into factions or, at an individual level, people can get on each other’s nerves. If someone on the board wants to talk about the process and other people on the board are happy to talk about it for a minute, but would rather talk about the strategic objectives, it’s up to the individual board member to pull themselves back, give space to that other voice, listen harder and respect what that other person is saying.
Ultimately, as board members, we know that we don’t know everything and need broader perspectives. We need that diversity of thinking to make sure we’re maximising the potential of the group.
5. Diversity of thinking is situated within demographic diversity
When you have a board that is gender- balanced and racially diverse, it helps people to listen to those different points of view because it changes the conversational dynamics. Demographic diversity is a subtle way of changing conversational behaviours around the board table. With gender balance, you tend to have more sharing of voice than you do when you have a single- sex board. When you have a board that is racially diverse, it stimulates curiosity behaviours. Conversational turn-taking and questioning are stimulants to help us elicit underlying diversity of thinking.
Demographic diversity has value in its own right, because it’s tapping into the full talent pool, but it also helps elicit diversity of thinking — which is an extra bonus.
This article first appeared under the headline 'Five Lessons on Broader Board Diversity’ in the June 2024 issue of Company Director magazine.
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