Some time this month of May, InHouse, a publication directed to in-house lawyers, will publish my article on diversity for corporate boards. It is accepted wisdom today that diverse boards are better boards in terms of process and resulting decision-making, although much of this data relates to gender-only diversity. And as my article points out, the history of surveys on the subject is spotted with contradictory conclusions.
Yesterday, one of my regular web-site sources reported that the US House Subcommittee on Diversity and Inclusion has held a hearing on the subject of examining economic benefits derived from strong board diversity programs. A major focus was on the financial services industry, long criticized for its deficiencies in this area. The undertaking was characterized as “bipartisan” which initially made me skeptical of the accuracy of the reportage, but putting my “aside,” well, aside, testimony based on a McKinsey study was submitted claiming that the top quartile for diversity teams were more likely to be above the national performance median and those teams in the lowest quartile were more likely to fall below the national performance median.
Testimony it seems was all affirmatively pro-diversity. Head of one Harvard policy program equated gender and racial diversity with novel solutions, greater integration and “higher collective intelligence.” One speaker noted changing demographics which shortly will make the majority of the US population into a minority. Recruiters emphasized that a robust program requires minorities on interview teams and candor about historical comp and promotion rates. Others mentioned growing customer and investor focus on corporate diversity.
If it is true that by 2045 the majority cohort of the US population (Caucasians) will become a minority, will there be affirmative action programs for this now-minority cohort? Will the minority still be in control so that the majority still needs protections or at least programs to establish appropriate mix of directors? I am not aware of any other major modern country that has “flipped” demographically, as will the United States. We are moving into new territory here, although sadly it is fostering negative societal reactions in some quarters.