Transforming the Search
Ron Lumbra of Heidrick & Struggles, is part of team that has taken action in placing diversity at the top of their list.
What trends do you see currently on Board Diversity?
We are seeing great demand from clients for diversity in the boardroom. It has been quite refreshing to hear diversity as one of the top priorities for boards and senior C-suite leaders today. I think the recent shift in headlines we have seen this year, such as the recent California legislation for Boards and #MeToo have raised a great deal of awareness and is driving meaningful change in the boardroom. It might be slower than we like, but we see the tides shifting. Boards with a focus on diversity have a substantial competitive differentiator when it comes to attracting and retaining top talent.
On the side of your clients, what are they most interested in when it comes to fulfill Board seats? Is Latino diversity on the table?
Our clients are most interested in building a board with top global talent that has the right combination of expertise to drive growth and purpose for company into the future. Latino talent is consistently part of the conversation, we often hear from our clients that they want to have their customer and employee base reflected within the boardroom. In fact, in our 2019 U.S. Board Monitor, which is an annual study of the trends in non-executive director appointments on Fortune 500 Boards, we saw that 23% of new board seats were filled by ethnic minorities (African-Americans, Asians/Asian-Americans, and Hispanics), up from 14% in 2009. Progress is slow but, improving.
What are the benefits you see of having a diverse Board?
With a more diverse workforce around the world today there are a variety of valuable benefits to having that carry over into the boardroom – including different orientations and broadened perspectives – which helps boards better anticipate and manage risks and helps directors better understand and think more creatively about key company stakeholders and strategic needs for the company’s future.
Could you share some insights from your Board practice?
As a firm, Heidrick & Struggles was the first executive search firm to make a global commitment to diversity. Last November, Heidrick announced that on an annual basis at least half of its cumulative slate of initial board candidates presented to clients will be diverse, reaffirming a commitment to promoting diversity in board of director searches globally. This was developed in collaboration with Stanford’s Rock Center for Corporate Governance, Heidrick & Struggles’ pledge is designed to increase the number of women and members of underrepresented groups considered by boards. Since that time, we have indeed seen Boards all over the world be more intentional and purposeful when it comes to insisting on diverse candidate slates and seeking diverse leaders to fill their new board seats. We have found that intentionality is a key part of change. And there has to be a commitment to open-mindedness and creating a purposeful plan for finding and considering candidates from diverse backgrounds. But it can work. Last year, 57% of Heidrick & Struggles’ board placements in North America were diverse – this underscores that there isn’t a shortage of diverse and qualified candidates. At Heidrick, it is our belief that strategic intent, coupled with purposefully expanding the definitions of the requirements for successful board directors, can go a long way to achieving more diversity at the board level.