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Equality and Diversity

July 19th, 2012

Boardroom culture: Under the microscope

1 comment

Estimated reading time: 5 minutes

Equality and Diversity

July 19th, 2012

Boardroom culture: Under the microscope

1 comment

Estimated reading time: 5 minutes

The case for improving diversity in corporate Boardrooms has long been made, but the current approach to it needs to be urgently radicalised, argues Atul Shah. He holds flawed unequal and undemocratic leadership in massive corporations, like Barclays, HSBC and G4S, accountable for the current fiascos and believes that consideration for equality and diversity in Boardrooms can make a difference.

The recent scandals of Barclays and HSBC, and the problems with G4S, bring into question the whole cult of the leader, and the culture and values of the Boardroom. Plenty of research has shown that in the Western world, the Boardroom is largely white and largely male. This is a major statement about culture – that only some people, from specific gender and cultural backgrounds, are capable of ruling. On the eve of London’s 2012 Olympics, this view is shocking, but true. Even the big companies which sponsor the Olympics have very little cultural diversity at the top.

In an age of democracy, and the huge free flow of information – how much longer will this lie prevail? Governments are clearly more accountable than global corporations. At least in governments, leaders are voted – not true in the case of the Corporate Boardroom, where often even Non-Executive Directors are mates of the Executive. And the size and footprint of global corporations is huge, with many having turnover higher than the GNP of whole countries.

Business education focuses primarily on profit maximisation and generating economic value. It therefore proposes that leaders are chosen on merit in competitive industries, but rarely looks at the reality of this appointments process, or the actual culture and values that are at the heart of business leaders today. Also given the fact that the bottom line has now shifted from a pure economic one to people, planet and profits, there is a much stronger case for Boardroom diversity than we ever had before.

Leaders talk about diversity, but rarely change their behaviour or actions. There is a huge debate presently going on about increasing the number of women in the boardroom, but even here, when we look at actual behaviour, it is tokenistic and the same white women are being approached by multiple companies for Board non-executive positions. Executive power still remains white and male.

To examine the whole culture of the Boardroom, the values and methods of operation, seems like too big a question to ask at this moment. But the reality is that this is probably the best time as any to ask, because large corporations are corrupting our social morals and values, exploiting the planet, and paying too little tax – simply promoting greed and divisiveness wherever they go, as opposed to contentment and inclusion. Also to divorce questions of equality from the very ethics and character of the Boardroom is hugely misleading.

So we need courageous conversations in business. And leaders need to face the facts, and study the science of equality and diversity, the nature of unconscious bias, and the importance of living an ethical life – not just talking about it. And shareholders need to become more active about Boardroom culture, and use their vote to demand change. Media also needs to become more radical. Otherwise, we will get the leaders we deserve.

Culture is a soft issue – not as clear cut and hard as money or numbers. And when we bring diversity into the mix, we are talking about multiple languages, multiple-world views, and different methods of dialogue and communication. For leaders who are obsessed by control, diversity is perceived as a pain – they want similarity not difference, domination not equality, even though they may not admit this publicly. The truth is that the world is diverse in its very essence, and therefore leaders should reflect this diversity and instead of trying to control and manipulate the outer world, they need to fit in with this outer world and acknowledge the diversity at the heart of the leadership.

The Arab Spring brought a paradigm shift in democracy in the Arab world. We need nothing less than a paradigm shift in Boardroom culture and values, if we are to see corporations behave fairly and ethically. The Boardroom is the core of any organisation. And equality has to be practiced at its very heart. Otherwise, the corporation is in breach of the spirit of the Equality Act – perhaps what is needed is more lawsuits against Boards to bring about serious change.

Dr. Atul K. Shah is an LSE alumnus and founder of www.diverseethics.com – His book ‘Boardroom Diversity – The Opportunity’ can be downloaded for free from his website. 

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Equality and Diversity

Posted In: Culture | Equality and Diversity | Gender

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