The banking industry is experiencing an awakening that corporate governance, whether in the executive suite or Board of Directors level, must be reflective and inclusive of communities we serve.
That means gender equality.
That means embracing our BIPOC and LGBTQ brothers and sisters.
Recent world events and high-profile acts of social injustice demand that recruiting and onboarding diverse leadership teams is a must and not negotiable.
As a female CEO who has risen through the ranks of this traditionally white and male-dominated industry, diversity has always been my mantra – it’s just good business. Now, I’m in a position to make it happen and hope to share some thoughts on how we’re making significant inroads to achieve this goal.
Quite often, corporate leaders and board members are selected from within social circles, through personal relationships and recommendations, and perhaps nepotism. Because board members were largely a homogeneous group of white men, they typically recruited from their own comfort zone – people who looked like them. Emphasis was placed on recruiting corporate leaders and board members who already had senior-level roles or previous board experience. There was not much opportunity for outsiders, women or minorities to advance, or even be given opportunity to prove themselves when their life experience, versus their title, demonstrated proficiency or expertise in a given area.
We now see a paradigm shift. Boardroom doors once closed tight have swung open for all who are skilled in both traditional risk topics such as audit, governance, credit and finance and all with expertise in the cybersecurity, digital/fintech, social media and communication challenges of today. Of course, being on a board also means willingness to work hard. The world is watching – closely. We need to get this right.
The time has come to shed the “this person looks the part and has played the part before” thinking. It’s time to recruit people with diverse backgrounds and skills and equip them with resources to succeed.
Benefits of gender diversity in corporate leadership go far beyond boardrooms and the walls of corporate America. Corporate executives, business owners, nonprofit leaders, and consumers who see people who look like them on boards change their expectations of what’s possible, even what’s expected. The trickle-down effect is palpable.
Achieving gender diversity simply makes sense. When the candidate pool expands to include women, you’re suddenly drawing from 100% of the talent pool.
A leadership team or board rich in diversity includes diversity not just of gender, but race, ethnicity, sexual orientation, economy, age, life experience and professional experience. Bringing different hardships and successes to the table creates an environment that is compassionate, open-minded, and understanding. Discussion becomes richer. You start tackling problems from different viewpoints. You get away from groupthink and start questioning the status quo.
Creating a board that mirrors communities we serve also means something to our clients. They want to see people who have similar backgrounds to them. They want to know their bank is in touch with the challenges they face.
But if we can’t just rely on our personal networks, how do we do this? How do we cast wider nets to find qualified candidates that offer a diverse perspective? It’s not impossible, but it takes a strategy and continuous effort. It’s not a “once and done” exercise.
As a mutual bank, our pool of corporators serves as a training ground for board roles, providing an opportunity to create a strong pipeline to grow and recruit directors. And the corporator meetings and training give future directors opportunity to better understand roles and responsibilities of the board. Institutions that don’t have corporators can benefit by creating advisory boards outside of the organization which can serve the same purpose.
I have also seen the value of affinity groups inside the organization, which serve as both an attraction and retention tool for diverse employee populations. Latinx, African American, Native American, Asian Pacific, LGBTQ+, military veteran, otherwise abled pods of employees can gather to discuss career growth, challenges, business development, employee (and board) attraction and retention initiatives. Having connection to others within affinity groups creates a sense of inclusion and engagement which produces positive outcomes for employees, clients and the entire organization. I’ve seen the value of these groups in many institutions I’ve worked in, both large and small. As CEOs and leaders, it’s OK to ask for help with diversity needs. When we get out of our own sphere of influence and into others, we grow, learn and expand.
Creating diversity in the board ranks can also be helped by eliminating barriers. Implementing age and term limits, for example, can ensure more opportunities for new recruitments. Casting a wider geographic net, even outside of your core market, obviously widens the pool. Increasing the size of the board may be a door to bringing in new and diverse voices.
Creating a great leadership team board that is rich in diversity and talent is work. It takes a strategy, a commitment and a multi-pronged approach to creating new pipelines of future leaders. We’re making great progress in our industry, but we still have work to do.
