“The more diversity, the better for boards” - Heidi Steiger
As a female board director, you can correctly assume I’m in favor of gender and ethnic diversity.
However, I am appalled by the lack of industry diversity that exists on many boards. I was recently interviewing for a board seat for a highly specialized industry and company.
After multiple interviews, I received the following feedback directly from the CEO as well as the board chairman:
- I was culturally a fit;
- I was a qualified financial expert, and they acknowledged that the only board member with this qualification chaired audit, and was about to retire due to term limits;
- They had been criticized by their shareholders for not managing their balance sheet well, and thought my experience as an investment banker would be very valuable;
- They needed someone with global business experience, and noted that I had extensive experience in the regions of the world which were important to them;
- While not from their industry, they acknowledged I had senior-level contacts which would be valuable to them;
- And, they preferred a woman. According to them, because of the highly specialized nature of their business, there were no women who met the above criteria within their industry.
What did the board do?
They added two men from the industry who did not possess the above criteria.
In my view, this is too common a story and is a mistake. The perspective of someone from a different industry can prevent “ivory tower” thinking and yield some competitive advantages.
For example, does a tech company really need another senior-level IT executive or rather a business person who can translate technology innovation into new products and markets? Does a logistics or a payments company need another executive from that industry, or someone who understands how to run a high volume business?
Oftentimes, experience in another industry easily translates. A case in point: a senior executive with global business experience understands the risks involved with overseas vendors, clients and employees/ventures from a GDPR, FPCA and cyber point of view.
Diversity in industry experience insulates boards from potential mistakes and can result in better overall performance. We can all learn from each other.
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