Why boardroom diversity brings business value

This is a guest blog by Julie Woods-Moss, CMO and CEO Nextgen business of Tata Communications

 

It was disappointing to see that according to the Female FTSE Board Report 2013, progress in increasing the representation of women on UK boards has stalled.  Although the number of women in non-executive director posts has crept up, the number of female executives has slipped from 6.7% to 5.8%. 

 

There has been much debate in recent years about how to tackle this problem and best promote the inclusion of more women in the boardroom. We’ve seen a wide variety of initiatives, ranging from STEM programmes in schools to calls for boardroom ‘quotas’ forcing companies to increase the number of female executives on boards. I’m personally involved in the ‘Women at Work’ or ‘WoW’ initiative at Tata Communications: a voluntary, professional network, open to all female employees, which creates opportunities and a community to retain and attract brilliant women. This includes leadership workshops, networking events and self-improvement programmes to establishing new employment policies.

 

In my view, it’s this kind of culture which is important. Women shouldn’t be appointed to board positions due to pressure from quotas or mere ‘tokenism’, but instead it is time for businesses to recognise the real value that a diverse boardroom can bring. We need to see a change in mindset, where there is a real recognition that knowledge and experience from different backgrounds can be hugely beneficial to business success.

 

As a testament to this, I was invited to the Decide Now Act (DNA) Summit in London which aimed to bring together the world’s 101 most innovative thinkers to co-create for social change. I was lucky enough to be on a panel which talked about women leading the way when it came to innovation. The panel was made up of leading women in technology including Joanna Shields, CEO of Tech City Investment, Gina Bianchini, founder of Ning and Mightybell and Kay Koplovitz Founder of the USA Network. Amongst other topics, the panel discussed how women globally can be encouraged into STEM industries, and the impact visible female role-models can have. Another member of the panel, Cindy Padnos founder of Illuminati Ventures, talked about her whitepaper study which showed technology companies led by women or which had diverse boards with women on performed better. Successful in their own right, they are real-life example of how traditional male-dominated industries can benefit from diversity. Tata Communications’ board recently announced targets to increase the participation of women at senior levels within the company.

 

And it’s not just gender diversity which should be promoted in the boardroom. Increasingly, we are seeing a demand for integration between diverse business roles and the importance of cross-fertilisation across disciplines.

 

Take digital skills, which can no longer be the remit of just the CTO. Now the CEO, CFO and CMO all need to be well versed in all things digital, and must understand how this fits into the wider business strategy.

 

Encouragingly, we’re already seeing evidence of improved communication and integration between departments.  According to a report, 38% of CMOs have deepened the tech skills they have in marketing.  However, there is still a large proportion of CMOs (60%) who believe that their lack of alignment with their own IT department is the biggest obstacle to reaching the consumers of tomorrow.

 

Clearly, ensuring that the boardroom is made up of individuals with a wide variety of experience across technology, finance, marketing and digital is becoming increasingly important. C-Level positions require an outlook which is far broader than one specialism, and a diverse boardroom which promotes integration and cross-sector understanding is vital to developing a coherent business strategy.

 

The time has come for businesses to embrace diversity, not just to fulfill quotas, but to create a team with a variety of experience and skills.  By welcoming different perspectives and sharing cross-sector knowledge, businesses have the potential to gain a real competitive edge.

 

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