By Elizabeth Ghaffari, President/CEO of Technology Place Inc.
Director registries and databases contain the names and information about either existing or potential board of director candidates. Women and minorities interested in the pursuit of independent director roles have argued that nominating committees and director recruiters, historically, have “reached into the same barrel” to find candidates for board roles. When existing boards and nominating committees only tap the same resource pool (whether it’s personal Rolodexes or existing director databases), the argument goes, we should not be surprised if the results are consistently the same homogeneous board candidate list: white, male, CEO, aged 65 years or older.
My research has uncovered several efforts to establish “diversity director databases” since the early 1990s. What does the research tell us about how we might work together to ensure that the current effort succeeds?
First, we have to define what we envision “success” to be. The 3D registry would be considered a success if it attracted competent, capable, experienced and willing director candidates from a diverse pool. Sources of competence include individuals with some core-level business-related education and training in the fundamental skills of corporate governance. Sources of capable talent include individuals who have been told they might consider corporate governance as part of their career trajectory. Sources of experienced candidates include individuals with some track record in organizations, committees, teams or other entities where collaborative efforts produce performance-oriented results. Sources of willing candidates are a bit more challenging. Where and how do you find individuals with a passion for leadership, an enthusiasm for business-building, and the desire to share one’s business acumen and insight to enable another business to thrive and grow?
We cannot simply assume anyone, warm and walking, will meet this standard. The database expects talent to apply and to be referred for this most arduous of tasks -- serving as a corporate director. Those “gatekeepers” at business schools, governance training programs, senior management, C-suite coaches and mentors, and director peers on existing boards have a fundamental duty to encourage talent that they observe performing to sign up, show up, and speak up about their interest in serving on a corporate board. We must encourage the very best talent to apply.
Second, we have to determine who is using this resource? The 3D registry would be considered a success if it were viewed by business entities (public and private), search firms, and the shareholder community to be a quality, reliable resource for talent. Nominating committees need to affirm, publicly at a minimum, that they included the 3D registry among their search resources. Search firms -- more than the one or two corporate members of the Advisory Board -- need to include candidates from, and refer candidates into, the 3D registry. The shareholder community needs to tap the 3D registry as one of several resources for candidates.
We cannot have the 3D registry become simply a tool of advocates and activists, as well-intended as they may be. If the 3D registry is to be a credible source of independent-minded talent, then independent-mindedness must be the priority selection criteria.
Third, we might consider some form of anonymity for director searches, at least for the early round of considering basic credentials and due diligence about qualifications. Nominating committees may need to screen out all references that might indicate gender, age, race, color, etc. in the early rounds of inquiry about possible director talent.
Finally, we should expect reportage from the 3D registry administration about its growth in headcount and successful placements. Additionally, we should expect reportage of at least the categories of those who use the 3D registry as well as (perhaps later) the scale or size of entities inquiring. If we do not see positive growth in headcount, placements and inquiries, within a short period of time, we should begin asking why is the tool not being utilized? Perhaps, this might be an appropriate element of governance scoring.
There is a clear and present need for diversity, independence, and competence on today’s boards of directors. Female candidates are one source of that talent as are minority candidates. The real challenge is to motivate boards to pursue that rich pool of potential candidates which matches their skill requirements and also to motivate diverse board candidates to ensure they are prepared, qualified, and actively pursue (through all the channels available to them) those board opportunities which match their skills and competencies.
The 3D registry is one of several important tools available to Nominating Committees to access today’s savvy resources. It also is potentially a new, rich and objective source of information and insight into today’s much tougher challenge of finding qualified directors who are able and willing to serve at the helm of our corporate boards.