True Diversified Governance is the Key to Success

There have been papers written on the importance of diversity within the Boardroom, yet there is still very much a trend for Boards to remain, old, male and stale. There have been some inroads made, however if you consider the length of time we have been talking about this, it is a very low rate of return.

Coming across an article Future of Work – Chandler Macleod “Unleashing the untapped potential of diversity”, I was inspired to look deeper into how important true Diversity is to the successful futures of the Northern  Territories organisations.

Diversity needs to be more than a numbers game

If we want to see a change in these antiquated structures, there needs to be more aggressive targets set.  Targets greater than the 30% (women) set by the Australian Institute of Company Directors, to be achieved by the end of 2018, are positive but by no means aggressive or diverse enough.

If we want to see change, then we need to rectify the issues that are currently putting constraints on achieving a truly diversified Boardroom, namely:

  1. We are still NOT embracing diversity at the Executive level of our organisations.
  2. We need to stop thinking of diversity purely on a gender basis.
  3. We need to overcome our struggle with coping with “Change” requirements.

The positive twist from the grassroots level is that there is a timeline on making these changes. Although it’s not being applied by the Boards themselves, it is being placed on organisations by their shareholders and stakeholders. There are a movement of investors and stakeholders who are letting Boards know that “male, pale and stale” does not cut it anymore.

If we are to create a successful society for the future, a ‘society for all ages’ in which everyone has a place and to which everyone can contribute, then widest cross-sections of our community has to be involved in shaping policy to this end.

Julie Bishop, Foreign Minister 

From this point it is important that we recognise that the ultimate obligation of our Boards, for each organisation they represent, is to act:

  1. under a framework of responsibility, judgement and accountability, and
  2. as agents for the stakeholders, both financially and operationally

The quote above, from Australia’s Foreign Minister, Julie Bishop, supports this realisation and highlights that if we do want to ensure we have a successful society, then it’s important that we have the widest possible cross-section of the the community shaping our policy.

Do we need to create a true Definition of Board Diversity?

The perception would be widely recognised that the meaning of “diversity” is having a range of people who are unalike, different from each other and hold alternative opinions.

Dictionary.com defines ‘Diversity’ as:

“the state or fact of being diverse; difference; unlikeness; a diversity of opinion”

“variety; multiformity”; “a point of difference”

“the inclusion of individuals representing more than one national origin, color, religion, socioeconomic stratum, sexual orientation, etc.; diversity in the workplace.”

‘investopedia.com’ defines a ‘board of directors’ as “a group of individuals that are elected as, or elected to act as, representatives of the shareholders to establish corporate management related policies and to make decisions on major company issues.”

However, there is no uniformed definition of “Board Diversity”, and the above two definitions probably indicate why it isn’t more prominent within our society. Although within the ‘investopedia’ definition, there is in part, an open invitation for ‘Board Diversity’; held within the line “or elected to act as, representatives of the shareholders”.

Therefore, in this writers view, a true definition of ‘Board Diversity’:

“is for public interest organisations, whether corporations or not-for-profits, to be open and transparent in the their dealings with the wider community.  While accepting a true diversified board structure, where there is a natural pursuit for inclusion of individuals, representing the entire array of the stakeholders, their organisation identifies to.” 

Chance Boondock

By undertaking this challenge, organisations would be identifying themselves to a more all-encompassing allocation of stakeholders, and therefore embracing a more comprehensive representation of the stakeholders.

To achieve this at the Board level, would require a strong and capable Chairperson, who is able to change the internal structures of an organisation, beginning where the majority of issues commence within an organisation, the Executive.

Why are we NOT embracing Diversity at the Executive level of our Organisations

It is amazing that this question is even raised when you think of it. Whilst reading the blog from Chandler Macleod, an Australian provider of integrated HR services, who posted the article “unleashing the untapped potential of diversity” (2016), it highlighted to me that without Diversity at an Executive level, where would the future direction of an Australian Organisation be.

Figures such as 75% of Australians identifying with ancestry other than Australian (2011 Census), highlight that a diversified culture within an organisation is paramount for the long term success of an organisation.

The Chandler Macleod blog piece also acknowledges that diversity is not just about culture, and that we need to look beyond inclusion alone.  That valuing and respecting people of different ages, genders, sexual identities, culture, abilities and beliefs, giving them an equal opportunity to unleash their potential, is also a necessity for our organisations long  success.

The article also highlighted what businesses want to hear, improving productivity, profitability, connecting with a broader customer base, improving creativity and innovation, increase employee attraction, wellbeing and engagement, and reducing staff turnover, comes as a result of recognising the value of diversity.

With all the benefits that Diversity brings to an organisation, it is incredible that there is still resistance for organisations to increase the diversity levels of their Executive. The reality is that ‘Diversity’ should be a strategy for your organisation and the Executive level should be driving the methods and manoeuvres that achieve those results.

When we look at what Lou Gerstner achieved at IBM, which was to look at ‘Diversity as a Strategy’ and not just a way of simply expanding their talent pool. Where Gerstner set up a series of task forces which enabled him to understand his markets, not just try and deliver a product to them.

“We made diversity a market-based issue.…It’s about understanding our markets, which are diverse and multicultural.”

Lou Gerstner

To reinforce the thought, that “why are Executives not embracing Diversity”, is a real thing. A fortune.com blog ‘Stop waiting for your CEO to diversify your office’ (2016), reports on Anjuan Simmons, a former Accenture and Deloitte technologist now in the start-up world, who has been delivering a revolutionary message about ‘Lending Privilege’, with the claim, “If you want to build a more inclusive workforce, don’t wait for the C-Suite to help you.”

The article articulates Anjuan beliefs “that inclusion will not work if it’s just a set of lofty, executive mandates. However what does work, is when everyday people with everyday power, adopt a set of leadership behaviors that help them notice and “lend their privilege” to people who don’t.”

So if we are to change the Executive level business culture of our organisations, we have to remove those inbuilt and often hidden elements that don’t support diversity.

This can be achieved by ensuring that the Executive levels of our organisations are accountable to the diversity of the population that are catering for, and rather than merely accepting diversity as a lofty mandate, they need to embrace our beliefs into their business strategies.

Diversity is more than ‘Gender’

The other side of the Board and Executive level ‘Diversification’ approach is the belief that having Boards that represent gender alone will appease the masses. The Northern Territory is a great example of where this couldn’t be any further from the truth. The diversity of the regions alone creates challenges that must be considered when selling the bigger picture to your stakeholders.

If a Territory organisation seriously wants to engage with the totality of the Northern Territory, then they must include the regions outside of the northern cities in the decision making process. Ignoring the outlying regions only creates further divide and causes rifts within localised communities, the ‘Berrimah Line’ is a great example of this.

Furthermore a small population such as the Darwin has many interconnecting and intricate affiliations, where the subtleties of supporters from many different regions reside, so being reluctant to encompass outlying regions will cost your organisation in the long run.

The Answer: Embrace Change!

It is well recognised that if you do not create change, change will create you, and if you resist change, it is still going to effect your life in some way, shape or form. Yet if you instigate change then it will be far easier to adapt to, and the benefits will be far more rewarding.

Change allows you to grow your perceptions, belief and performance and the strongest organisation recognise that to embrace change, is to embrace success.  The long lived mantra “If you always do what you’ve always done, you’ll always get what you’ve always got.” is testament to this.

Having a healthy perspective of where an organisation sits is not not a bad thing, after all, if something is working for you, why should you change it? Hearing the phrase within the workplace “if it ain’t broken, then why fix it”, makes sense for the hear and now, right?

‘Complacent’ is an extremely dangerous word for any organisation to be identified with, it means that there is no awareness of the dangers that are ahead.  It means that there is an underlying resistance to integration and adaption, it means that there is fear or pain of the outcome that change will bring.

Even in the best run organisations there are components that require tinkering with. So having an organisational mantra, which operates with the understanding that the ability to adapt to a changing environment is a positive thing, will enable the organisation to change and improve what’s not working for them, more effectively and in a far more timely manner.

 

Regularly within our communities, we see smaller organisations grab hold of something that is in the ‘hear and now’ and make it work for them. The reason they are able to do this, is that is far easier for them to change and adapt, they are small in employee numbers, therefore they only have to change the direction of a small number of minds.  Whereas for large organisations to do the same, there are processes and procedures that need to be considered before a decision is finalised, and delivered into the public domain.

If we are to achieve the request of the Foreign Minister, Julie Bishop, of embracing the widest cross-sections of our community to help create a successful society for the future, then we need to embrace adaption, the ability to change at all levels.

What this means is that we need our Governing bodies and Executive’s, to have adaption as part of their DNA if they are to truly embrace change, and believing in the creativity of the workforce, within their business.

How can we create this change? By having our Boards and Executives operate under an ‘Agile Management’ style rather than the more traditional management style. To achieve this means altering the focus on key elements of the organisations outcomes. Namely to be less aligned with profits and communicating from the top down, and to be more considerate to the customer and the value of a horizontal communication approach.

Steve Denning, from an article he contributed to Forbes “How To Make The Whole Organisation Agile” identifies 5 major shifts to transform an organisation from a ‘Traditional’ to ‘Agile’.

 

Traditional V's Agile Management Styles
Table by Chance Boondock, based on Steve Denning’s article in Forbes “How To Make The Whole Organisation Agile”

 

A Better Way: The Creative Economy https://www.forbes.com/sites/stevedenning/2015/07/22/how-to-make-the-whole-organization-agile/#6dd893458417
A Better Way: The Creative Economy. The principles are not a random collection of improvements. Together they also form a mutually reinforcing sequence. https://www.forbes.com/sites/stevedenning/2015/07/22/how-to-make-the-whole-organization-agile/#6dd893458417

 

#Enuffsaid

 

 

 

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