Board Diversity: why it matters and how to fix it

Joe Caccavale

9

October

2020

|

5

min read

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Diversity has to come from the top.

You can come up with initiatives.

You can spend money on training.

But if you’re not leading by example, you’re wasting your time.

Your board represents the very highest level of the company.

The board dictates where your company is heading and what its core values are.

If you preach about diversity whilst it doesn’t apply to your board - what message does that send? 

That your diversity efforts are just lip service?

Whilst we’ve come a fairly long way in recognising the importance of and improving workplace diversity, board diversity remains unchanged.

UK board diversity stats

  • Here in the UK, the number of BAME board members, both executive and non-executive, has dropped to 7.4% (down from 9% in 2018)
  • 47 of the FTSE 100 companies still have no BAME people at the board and executive director level
  • Across the FTSE 100 - just 84 directors out of 1,048 were from BAME backgrounds.
  • Females make up just 28.8% of board representation

Stats courtesy of The Guardian

Let’s quickly explain what is meant by diversity

Diversity means understanding and appreciating that individuals are unique. Diversity can take many forms, from gender and age through to religious beliefs.

When we talk about workplace diversity, we tend to hone in on just two types of diversity: race and gender.

Whilst these are obviously vital forms of diversity to measure and improve, we should value all types of diversity, not just those which are the most obvious.

Why is diversity important?

Diversity of thought

Diversity of thought referrals to the unique viewpoints people with different backgrounds can offer.

If you have a non-diverse board (in the typical sense), diversity of thought isn’t a get-out clause, representation still matters.

However, try not to over-index on surface-level diversity.

Looking only at the optics of your board is essentially tokenism.

Yes, you want all groups to be represented (especially those who tend to be marginalised).

But the real business value of diversity comes from unique perspectives and ideas gained through life experience.

You may have an ethnically and gender diverse board, but if they’re all from similar academic and professional backgrounds, how likely is it that someone will have an out-of-the-box, outsider perspective that could lead to real innovation?

The benefits of this diversity are very real:

According to Boston Consulting Group, innovation revenue is 19% for companies with above-average leadership diversity.

And a Harvard Business Review study revealed that teams solve complex problems faster when they’re more cognitively diverse.

Understanding of customers 

Your customer base is likely going to be fairly diverse.

So the more diverse your board is, the better they’ll be able to map the market and understand what actually makes your customers tick.

If a customer demographic is represented on the board, there’s a better chance their needs and concerns will be considered and baked into your strategy.

Employer brand

According to Glassdoor, ⅔ of job seekers consider a diverse workforce to be an important factor when considering job offers.

Making sure your board is diverse shows both employees and potential candidates that your organisation is genuinely committed to diversity.

Over the past few years, diversity has become a hot topic. As a result, many companies have felt the need to cash in on this, or been pressured to take action by their stakeholders.

What we end up with is the current situation: plenty of rhetoric about diversity and schemes for lower to mid-level positions, but a distinct lack of diversity where it perhaps matters most - at board level.

How to improve board diversity

Remove unconscious bias from your hiring process

Whether we like it or not, we’re all prone to unconscious biases.

We make snap judgments and associations that negatively affect decision-making.

How do we know this? Because we found that 60% of people hired ‘blind’ through our platform would’ve been missed with a typical CV screening.

Bias doesn’t just harm diversity…

It results in talent being overlooked.

The only way to effectively remove bias from hiring is to hire ‘blind.’

You can use a platform like Applied to automate this for you, or you can set up a similar process manually - we made the guide below to help you do just that.


Although board members are often hired because of who they are, we challenge you to do things differently.

Not convinced blind hiring can work at board level? Feel free to check out this blog post on the nitty-gritty of blind hiring senior team members.

Don’t rely on referrals

Board candidates are often recommended by current board members.

When the stakes are so high, it’s natural to lean on others’ networks and referrals rather than risk hiring or even wasting precious time interviewing someone unsuitable. 

However, employee referrals can hinder diversity.

Referred candidates tend to reflect their referrer in terms of gender, ethnicity, age etc.

As a result, women and ethnic minority talent are less likely to receive referrals.

If you rely too heavily on referrals at this level, then board diversity is extremely unlikely to ever shift.

This doesn’t mean you should ditch referrals altogether - they do still yield great candidates and can be cheaper and quicker than going through job boards.

Just make sure that candidates are still assessed equally, regardless of who referred them.

Also, since referred candidates often mirror the referrer, try asking employees from underrepresented groups to share open board positions with their networks too.

We went deep on the pitfalls of (and the right way to do) employee referrals here.

Test for expertise gained through experience, not just experience

When hiring at the most senior level, it’s completely understandable that you’d want someone with a wealth of experience, since, in essence, you’re hiring them for this experience.

But if you want to improve board diversity, bear this in mind: experience isn’t as predictive of ability as you think.

Of course, the chances are that you’ll end up hiring someone with heaps of experience.

Just be sure that you hire someone based on their skills, not just their years of experience.

Why? Because not all experience is equally valuable or relevant. 

And sometimes it’s an outsider perspective that makes someone the best hire.


Applied was designed to find the best person for the job using behavioural science and data - whilst removing unconscious bias from the hiring process.

Read our resources to find out how we’re changing the way the world hires, or jump right in with a free trial of the platform.