The spring of 2016 brought another round of reports on the pale state of the U.S. boardroom. It remains a whiter shade of pale, predominantly male.
In its annual review of corporate board appointments, the executive search firm Heidrick & Struggles International Inc. labels the latest crop of Fortune 500 directors “the usual suspects,” noting “stalled progress for women appointees” and “generally flat numbers for directors of Hispanic, African, and Asian descent.” The problem of a lack of diversity in corporate leadership is not just an American one, either. In 2015, the percentage of new female CEOs at the world’s top 2,500 companies was at its lowest since 2011 — a measly 2.8%, notes PwC’s Strategy& in its latest CEO Success Study.
There is no doubt that the forces of sexism and racism are alive and well in the upper echelons of the corporate world. But there’s more going on here than that.
Corporate boards and executive teams are self-regenerating: They largely hire their own replacements. And like all human beings, board members and executives have cognitive biases — blinders that affect how they view the world. So when boards consider the backgrounds, skill sets, and experience that make someone suitable to join their ranks, they tend to look no further than themselves to find the archetype.
To overcome the mighty dose of institutional bias that favors more of the same, we need to get pragmatic: Instead of focusing on the benefits of diversity, let’s fix our attention on the growing risks of uniformity.
I suspect that some of the most pervasive causes of corporate failure can be traced back to the common sets of experiences shared by many boards and executive teams. When business leaders say, “We didn’t see it coming,” after their companies fail to recognize the legitimacy of upstart competitors or customers’ changing tastes, who is the “we”? Our corporate directors and CEOs. In the global economy, the markets a company serves become less predictable and more heterogeneous every day. When too many people at the top are looking at our dynamic world through the same static scope, they are far more likely to miss seeing the full landscape in all of its fast-evolving glory.
We need to improve our organizations’ peripheral vision.