Diversity and inclusion matter at all levels of our economy.
In corporate boardrooms, diversity of thought, experience and perspective among decision makers constructively challenges the status quo and creates better strategies for success in today’s complex, global economy.
It’s clear that board diversity drives innovation, growth and long-term shareholder value as well. All of that goes right to the bottom line – companies with more diversity are much more likely to have above average financial returns, according to business management consultancy McKinsey & Co.
Unfortunately, Pittsburgh is underperforming.
Relative to the national average, African-Americans are under-represented in the boardroom and in C-suite positions here. Less than 5 percent of board seats within Pittsburgh’s 30 largest publicly traded companies are held by African-Americans, which means the gap in Pittsburgh is 40 percent below the U.S.
Although placements of women have been more successful – accounting for nearly 20 percent of board representation in our region, which is comparable to the national average – progress has plateaued. Experts say the impact of gender diversity is felt when there are at least three women on a board to shape a company’s strategy and direction.
As these numbers reveal, there is work to do in our region that requires leadership commitment, intention and action. Changing demographics and board member retirements mean the time to act is now.
As we know from the Allegheny Conference on Community Development’s “Inflection Point” report, we have a substantial gap to fill in elevating, attracting and retaining enough employees to meet workforce needs in the next few years. The diversity of our workforce continues to grow; leaders who are more diverse are best positioned to succeed in employee attraction and retention.
Nearly one in five directors will vacate a board seat over the next five years, according to Ernst & Young, giving nomination committees the opportunity to select new faces for leadership. More diversity at the top has impact throughout the organization, especially when boards set goals and track progress on building more inclusive workplaces.
In the past year, the newest board members in Fortune 100 companies are challenging the status quo – they are more likely to be women, are younger and less likely to have served first as a CEO, instead bringing other kinds of experience in academia, the military, government and in driving innovation.
Pittsburgh has the potential to take the lead, but corporate leaders must do their part. There is a gap between the 62 percent who establish diversity as a priority and the 46 percent who require a diverse slate of candidates for open positions.
Closing that gap is the first step. To help do that, the Pittsburgh region is hosting two mid-November events in collaboration with one another and focused on placing African-Americans and women through direct networking and connections.
The first-of-its-kind African-American Directors Forum (AADF) will bring together CEOs, C-suite executives and board leaders from Pittsburgh’s public companies with more than 40 high-level African-American executives who already serve or are ready to serve on corporate boards. F.N.B. Corp. is the lead sponsor.
The annual 2020 Women on Boards (WOB) event, an initiative to increase the number of women on public company boards to 20 percent by the year 2020, occurs the next day.
WOB has been leading the conversation on the importance of board diversity since 2015 and is working closely with companies and partners to bolster efforts.
Both events will feature powerful keynotes, engaging panels and candid conversation.
But it’s time to do more. Let’s seize the opportunity to make our board leadership more representative and successful by acting intentionally to consider diverse board placements in 2018.