By Susan C. Keating
Editor’s Note: The below opinion is expressed in conjunction with the International Women’s Day which falls on Monday (March 8)
BOARDROOM diversity is no longer simply nice to have – it has become a driver of global business success. As the world’s largest community of global women board members, WomenCorporateDirectors (WCD) applauds the tsunami of support for gender and racial board diversity from financial institutions around the world.
Norway’s sovereign wealth fund, the Carlyle Group, and Nasdaq are only the latest in a growing list of industry leaders incorporating boardroom diversity into their business and investing models.
Black Rock, State Street, and Vanguard are other powerful forces in the movement to accelerate gender and racial diversity on boards, threatening to not invest in companies, or to vote against their directors who fail to act.
These institutions have been explicit in linking diversity to a company’s performance and good governance.
In its position paper just released, Norway’s fund stated: “As a long-term global investor, we are concerned that companies with boards that are not diverse will not be able to maintain the trust of their customers, investors and society at large over time.”
Vanguard has expressed the same, stating in a report that if there is a lack of commitment to progress on diversity, “We become concerned that long-term shareholder returns may suffer.”
The growing show of support from these heavyweights – bolstered by Goldman Sachs’ push for board diversity prior to taking companies public – reveals unstoppable momentum.
This movement is about writing a new chapter in corporate governance – visionary in its goal to capture expertise from an underrepresented group of highly qualified professionals to effectively respond to the increased complexity businesses are facing today.
There is a pipeline of exceptionally qualified women filling C-level and comparable positions today – including women in racial, ethnic, and other minority groups – who are eager to help boards fulfill a greater vision for 2021 and beyond.
WCD alone has a network of 2,400 members – directors of public or large privately-held companies – from dozens of countries around the world.
The steps we are all taking toward assuring greater board diversity are critical and necessary. Looking back in history, progress often seems inevitable.
But inevitability usually disguises the true decades of hard work and advocacy, failures and re-tries, and using everything you’ve got to make just some of the gains you envision.
We honour the trajectory and the movement and are proud to be a part of it. – March 5, 2021
Susan C. Keating is the CEO of the WomenCorporateDirectors Foundation.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
