Cleary's "Diversity Considerations" provides an informative, succinct overview of the ways in which numerous and diverse stakeholders - including investors, state policy makers, proxy advisors, and employees - have stepped up their scrutiny of, and expectations regarding, corporate gender diversity, and suggests a series of factors boards should consider in developing a responsive strategy, including:
- No company is immune from the push for increased board diversity. Companies (regardless of size) with no board diversity can expect increasing pressure to diversify, and even diverse boards can expect pressures for increased diversity to achieve "critical mass."
- This is not a one-time fix. Refreshment plans need to address diversity as a "sustainable state" - not just to manage short-term pressures.
- A lack of diversity in the industry will not be an acceptable excuse for a lack of board diversity. Industry-specific "excuses" for a lack of diversity that may have worked in the past are unlikely to be accepted by stakeholders going forward.
- Carefully consider company statements and actions from a variety of perspectives. The fact that numerous, diverse stakeholders are now focused on this issue means that corporate communications & actions may be viewed differently by different audiences - warranting more comprehensive and thoughtful planning before a launch.
- Be proactive. Expect continued evolving stakeholder expectations. Avoid being put on the defensive.
- Consider diversity from a holistic perspective. Diversity expectations have transcended board composition to key board committees, board leadership, and senior management - with other areas of scrutiny likely.
The article is one of many included in Cleary's "Selected Issues for Boards of Directors in 2019." Individual topics of interest may be accessed here.