Inclusive boards: demystifying inclusion
A version of this article was published in the Institute of Corporate Directors Director Lens Communiqué in January, 2023.
Do boardrooms belong to everyone? You might think so, from observing the proliferation of articles, op eds, conference sessions, and workshops on the importance of board diversity. But just because a group is diverse doesn’t mean that it’s inclusive – a fundamental requirement for getting the best decision-making outcomes. As Josh Palmer of OnBoard asserts, inclusion is “the superpower that activates diversity”.
Diversity: are we there yet?
Canadian directors now understand that a diverse board – diverse in terms of sex and gender, cultural background, experience, age – is a requirement for organizational legitimacy. Shareholders, employees, and the public all demand boards that are representative of 21st century Canada. Studies also repeatedly show that diverse groups make better decisions: diverse boards lead to increased innovation and levels of risk-taking that maximize performance.
Dr Carol Liao, Associate Professor and Director of the Centre for Business Law at UBC Allard School of Law, observes, “We’ve decided that board diversity is the right thing to do ethically and the bright thing to do in terms of organizational performance. And yet, the numbers still don’t add up. While Canadian boards might be heading in the right direction, progress is so slow we might not see gender parity in my lifetime – let alone other types of equal representation.”
While all-male boards seem like an anachronism, 11.6% of all TSX-listed company boards still have no women directors. And only 10% of CBCA corporation board directors reflect diversity beyond gender: members of visible minorities, Indigenous people, and people with disabilities. Consider those numbers in the context of one in four Canadians being a member of a racialized group and a similar proportion living with a disability, and you’ll see we have a long way to go.
Unlocking the superpower of inclusion
In the early days of my governance career a chair told me, “on this committee we play total football”. What he meant was that my contribution was not just valued, it was expected. He had created a culture in which everyone’s voice was heard. For a 20-something in a room with much more experienced professionals, it was a powerful moment that fundamentally shifted how I saw my role.
But not all new directors are as fortunate; without a deliberately inclusive culture even very experienced individuals can take a while to find their feet. Ellen Pekeles, C. Dir, was already a seasoned executive when she joined her first board but recalls, “The first time I walked into a boardroom as a director, I did not feel completely comfortable. It probably took me a year to contribute as fully as I was used to in my executive career – largely due to the non-inclusive style of the board chair.”
What does an inclusive board look like?
As Mark Williams, CEO of the Toronto Symphony Orchestra, puts it, the aim of inclusion is “not to kick anyone out but to make the tent bigger, to open arms wider, to bring in more people”. Every inclusive board will look and feel different. What they have in common is:
a welcoming, adaptable culture, that acknowledges that all participants bring value,
psychological safety, meaning that all participants feel safe to speak up, challenge ideas, and take risks,
thoughtful decision-making in which alternative perspectives and possibilities are explicitly called out and explored before a decision is reached,
collegiality without groupthink,
and mutual respect and trust.
In this series on demystifying inclusive boards, I’ll explore how to deliberately create an inclusive board culture that ensures that boardrooms really do belong to everyone. We’ll look at how meetings are run, director recruitment and orientation, education, and how boards oversee organizational strategy. Look out for the next article in [date]’s Director Communiqué.
Go deeper
Learn about how thoughtful governance practices combined with a diversity of perspectives and experiences can improve board performance in the CGI’s report on Effective governance in uncertain times
Get more insights on constructive challenge in WATSON’s article Is Canadian culture preventing constructive dialogue?
Shona McGlashan is a Fellow of the Chartered Governance Institute. As principal at McGlashan Consulting, she advises organizations, boards, and leadership teams on corporate governance, EDI, and workplace wellness. She lives and works on the the xʷməθkwəy̓əm (Musqueam), Skwxwú 7mesh (Squamish), and Səl ̓ ı́ lwətaʔ/Selilwitulh (Tsleil-Waututh) Nations.