When recruiting board members in the 21st century, diversity and inclusiveness must be at the top of the list. A board that is primarily dominated by one gender, ethnicity or age runs the risk of missing out on new ideas from different perspectives. Today, stakeholders want inclusive boards where there is a wide range of representation.
Unfortunately, construction and engineering firms across the country struggle with board diversity. Competitive firms need a high performing, strategically focused board that sees the big picture and thinks beyond daily operations.
Below we have listed five telltale signs that your board needs to work on diversity and inclusiveness.
- The BOD approves management’s ideas without challenging or contributing original thoughts of their own. They fail to recognize future disruptive trends.
- The BOD focuses on day-to-day performance issues rather than forward-thinking strategies to address disruptive trends.
- The BOD is primarily dominated by one gender, ethnicity, age and area of expertise.
- The BOD identifies disruptive technologies and emerging trends but fails to provide unique insights and solutions.
- The BOD lacks the skillset, experiences and perspective necessary to lead the firm in the right direction.
If any of these characteristics sound all too familiar, your organization is at a competitive disadvantage. To address systemic bias, those responsible for appointing board members should focus on skills, levels of interest and commitment. Rather than trying to sell the idea of joining your board to those you identify as potential board members, try testing their ability to serve on your board. Below we have outlined several tips for creating a future-ready board of directors.
- Start with a gap analysis. Assessing the firm’s actual performance against the desired performance will help the decision maker identify and close those gaps. A gap analysis should evaluate the skillset and experience of both management and directors against the needs of the firm. The comparison should include major business functions. Once you have identified the gaps, you will need to determine what resources will be necessary to meet the long-term objectives. What types of directors do you need to close the gaps you identified?
- Determine your ratio of external to internal directors. Many firms struggle to find the right balance of independent to internal board members. Each entity has their benefits and challenges to consider. For instance, outside directors bring new perspectives and ideas, but they tend to lack firm-specific knowledge.
- Look beyond subject matter expertise. A high functioning board needs to have more than relevant knowledge and experience. Other factors that make a great director include forward-thinking capabilities, excellent communication skills, commitment and genuine interest.
Addressing diversity and inclusiveness can be overwhelming. We recommend selecting one component of your board’s diversity to improve and start there. Increasing the diversity in one area will naturally lead to diversity in other areas. The professionals in our office can help your firm develop a future-ready board of directors. Call us today.