Diversity is a topic that has gotten under people's skin, and rightly so. Much has been written, spoken and argued in recent times. Many blog rolls and column-inches have been expended by people arguing for or against various physical incarnations of diversity in the executive suite and boardroom. Clearly, the seed diversity has sprouted, but for what purpose? What is the endgame? And importantly, what should the endgame be?
Many have argued that that the presence of women on boards is causative to increased business performance, whereas others have reported opposite views. The reality is that the research results show positive, neutral and negative correlations. This should be of no surprise. That such a blunt stick (gender, the physical attribute) might make a consistent difference beggars belief. I have mused on this in the past. Thankfully, the argument is now starting to mature, beyond the physical aspects to diversity (gender, race, ethnicity, age, et al) to the identification of underlying attributes and qualities of capable executives and directors, to understand how directors contribute and work together.
This development was much needed, but another question lies in wait: the 'so what?' question. What is the purpose of loading women onto boards and increasing diversity in executive suites? Is it simply a political (equality) agenda? Or is the goal profit maximisation for shareholders? Or is there some other sustainable purpose that needs to be brought into focus?
Businesses exist to provide a product or service at a profit and, in so doing, provide a (hopefully!) healthy return to those that invested in the business in the first place. Is this the endgame? It might be for some. However, as diversity for diversity's sake is not sustainable, neither is profit for profit's sake. Shareholders do not live in isolation from others in the community. If shareholders 'win' (through the accumulation of profits), it stands to reason that losers will emerge.
The challenge for all of us to to lift our gaze beyond simple measures like the number of women on boards or quotas; beyond business performance; and, if we dare, even beyond profit maximisation, to think about the endgame. Phil O'Reilly, CEO of Business New Zealand, recently said that the purpose of capitalism is greater than profit (although that is a reasonable and necessary output). He said that the purpose was strong communities. Could that be the endgame we need to focus our attention on?
Thoughts on corporate governance, strategy and effective board practice; our place in the world; and, other things that catch my attention.