Sustainability in Action: Lessons From Oaktree’s Panel on Board Diversity
J. Veronica Biggins
Managing Partner at Diversified Search
Senior advisor to Oaktree’s Infrastructure Investing team and former Global Vice Chair of Talent at Ernst & Young
Trustee of the Oaktree Strategic Credit Fund and co-founder of Vicente Capital Partners
Senior advisor to Oaktree’s Infrastructure Investing team and former President of UPS
Groupthink is dangerous in any organization. It can reinforce bad habits and limit the potential for innovation. But avoiding this pitfall is challenging when a company lacks diversity, especially on the body that guides company policy: the board of directors. Oaktree recently held a panel to discuss best practices related to increasing diversity on corporate boards. J. Veronica Biggins (Managing Director, Diversified Search) moderated this thought-provoking discussion with two senior advisors to Oaktree’s Infrastructure Investing team and a trustee of the Oaktree Strategic Credit Fund. We’ve collected several key takeaways from the conversation, in which the panelists offer practical advice about removing artificial barriers, creating true inclusiveness, and refusing to accept the status quo.
“How do you measure success? First, you should keep yourself honest by tracking the number of diverse candidates you have for each search. You come up with the characteristics that you want in a board member. Once you have that criteria, you can make sure that you expand the net to include diverse candidates. So be intentional, keep a scorecard, and then see how many searches actually get filled over the next five years.”
“I’ve seen the best candidates come, in many cases, when companies are transparent about what they’re looking for in the role – often more transparent than they used to be – and have asked people for referrals.”
“This notion that people are competing for one seat should be thrown out. There’s nothing magical about having seven members on a board. Boards can be expanded. If you have seven board members, but you want to increase diversity, there’s nothing stopping you from increasing the number of seats to nine and then going out and finding new candidates.”
Listen and Learn
“There should be learning on both sides. Board members will contribute something, but they’ll also learn something. When everyone is focused on listening and learning, they’ll be more engaged, and the discussions will be more productive.”
One Person Isn’t Enough
“When you have a board of any substantial size – I would say seven or above – you should never have just one person from an underrepresented group. If you have just one woman around the table, it’s very natural to treat that person differently. If you have two or three, all of that goes away, and you can actually hear those different perspectives.”
“Where I’ve seen companies make mistakes is having programs that only focus on their diverse populations. But everybody needs mentoring; everybody needs development; everybody needs to be included in succession planning and the most important conversations. So it’s a matter of raising the level of support and focus for everyone. It has to be a comprehensive approach.”
Give People a Voice
“Make sure that the newest board members speak first, because then you’re ensuring that their voices are being heard. You’re not waiting for them to find their voices. They’re being put front and center. It’s all about being intentional.”
“You should never get complacent, because the challenges continue to grow. It’s not enough to just increase diversity within your own hallways. You need to look at your entire supply chain – all of your constituents and stakeholders.”
“To me, inclusiveness means respecting differences, paying attention, and understanding that if you’re not careful, the diverse voices can be silenced. It’s really nice to sit around a table with people who think like you and agree with each other. However, if you do that, you’re likely not having the tough discussions that are needed at any organization. And if you don’t have leadership at the board willing to say, ’let’s stop and respect that opinion,’ then diverse voices can get pushed out.”
Don’t Make Excuses
“It’s a new day. After the pandemic, the CEO’s job has changed tremendously. The responsibility they have to all of their stakeholders is front and center. So if people are telling the CEO that they can’t find diverse candidates, then the CEO needs to consider getting rid of those people, quite honestly, because they’re the problem.”
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