Over the past five years, sitting and former chief executive officers (CEOs) and chief financial officers (CFOs) together claimed almost two-thirds of new appointments to Fortune 500 boards.
However, according to a blog entry by Bonnie W. Gwin, vice chairman at executive search firm Heidrick & Struggles, while these executives clearly add a lot to the boardroom, this trend also means that diversity is limited – and not just ethnic and gender diversity but diversity of experiences as well.
Given that it is those different perspectives that often lead to new ideas, fresh perspectives and business value for a company, Gwin proposes five steps companies can take to ensure diversity of experiences and perspectives in boardrooms:
1. Rethink your default setting. CEOs certainly bring a lot of skills to the table, but many outstanding general managers and divisional heads possess the same skills that make CEOs such attractive candidates. It might also be worth considering presidents of universities or retired public servants who can bring qualities of executive leadership.
2. Consider top functional leaders. Many boards have been reluctant to bring on executives with strictly functional depth, other than CFOs. But a director whose functional experience is relevant to a key area of your company’s strategy can add great value. 3.
3. Catch a rising star. By searching diligently, your board can also find younger executives on the fast track to the top. As a group, they’re generally more diverse than in the past and they will furnish many of tomorrow’s CEOs.
4. Don’t rule out well-run private companies. Traditionally, many boards have been unwilling to look to private companies for board candidates. However, the surge in private equity investment has been accompanied by the recruitment of strong public company trained leaders to the private company sector.
5. Insist on a diverse slate of candidates. Often, non-traditional candidates are seen as risky. But there is enormous risk in not diversifying your board. With a disciplined search process, you can create a more diverse board without courting risk.
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