The Search for Diversity on Boards

Canadian companies would be wise to avoid relying too heavily on a limited pool of business leaders to guide their organizations. According to a new report by LHH Knightsbridge, to be more inclusive, candidates should extend beyond the traditional definition of excellence to be more inclusive and representative.

June 23, 2021 – For the last 10 years, LHH Knightsbridge Search’s Tim Hewat has worked closely with Junior Achievement of Canada to help manage the nomination process for executive induction into the Canadian Business Hall of Fame (CBHF). Along the way, his role evolved from managing to challenging, and ultimately to changing the process to make the Canadian Business Hall of Fame more diverse and inclusive. “Over time and by using proven executive search approaches I coached the nominating committee to envision and ultimately embrace a different definition of leadership excellence, thereby broadening the search criteria,” Mr. Hewat said. “At the same time, I led our team to identify and bring forward nominations that not only exemplified corporate business excellence as classically defined but extended well beyond that traditional definition to be more inclusive and representative of a wide array of highly accomplished business leaders across the country.”

Mr. Hewat said that a client recently told him that what LHH Knightsbridge had been able to do in support of modernizing the CBHF is really a “model” for corporate board recruitment. This individual told him that how the firm had helped the client to consider non-traditional candidates and then led the search efforts to deliver on this expanded profile was precisely what Corporate Canada needed to do to achieve its diversity goals for boards of directors and executive suites alike. “It was a eureka moment for me,” said Mr. Hewat.

2021 Diversity, Equity & Inclusion Recruiting Report:
Building a Balanced and Diverse Workforce

Hunt Scanlon Media’s latest market intelligence recruiting report – this time focused on Diversity, Equity & Inclusion – will be available later this fall! The nation’s top executive recruiters are resetting expectations and looking for new ways forward to build balanced and diverse workforce teams for their clients.

According to executive recruiters, DE&I should not just be a priority, but an integrated part of every company’s leadership goals. Some companies have even tied DE&I metrics to executive compensation. But it’s more than that.

Part of building strong, diverse hiring teams means asking yourself: “Who is my company culture going to attract – and how will it engage people who are here?” This question can be very difficult to answer if you assume everyone feels welcome already just because you do. Fostering diversity, equity and inclusion within organizations is more than just the right ethical decision. “It is one of the best business decisions a company can make,” said Keri Gavin, a partner with Hanold Associates and leader of the search firm’s Global Diversity, Equity & Inclusion practice. Hanold Associates is a proud sponsor of this year’s report. This report will help organizations prioritize DE&I as a business imperative that drives greater competitiveness, innovation and business results. Get it now! 

“For longer than I have been supporting the CBHF, I have assisted companies of different sizes, and types to find directors outside their regular networks to serve on their boards,” Mr. Hewat said. “There is a pressing need in Canada, as there is in most countries, to ensure that organizations don’t rely too heavily on a limited pool of business expertise to guide our corporate entities.”

Government, investors, and increasingly, customers expect greater diversity at the very top of Canada’s corporate community. Last year, the federal government amended legislation to require publicly traded companies to provide shareholders with updates on policies and practices related to the pursuit of greater diversity on boards and in senior management. “This does not simply refer to gender diversity; these amendments made Canada the first jurisdiction in the world to adopt disclosure requirements related to the representation of indigenous people, people with disabilities, and other visible minorities,” said Mr. Hewat.

 Tim Hewat focuses on building the technology practice (technology, media & software) in Canada, as well as working with clients in other major market segments. His consulting approach starts with gaining an understanding of his clients’ growth strategies. This business approach, underpinned by a solid search methodology. He continues to be personally involved in every search, ensuring a tight focus on selecting the right candidate.

A worthy goal like that does not come without its complexities. “As is the case with almost all efforts to promote diversity, gaining board/C-suite support for new and different success profiles for these roles is only half of the challenge,” Mr. Hewat said. “You also have to find people willing to step up, envision themselves in new ways, and take the risk of being a trailblazer.”

Competing strategies for recruitment of board members

Mr. Hewat says that he typically tells people there are two basic approaches to filling a board opening: there is the “DIY” strategy and the “Expert” strategy. “Let’s start with the ‘DIY’ strategy – doing your own board search work,” he said. “In this approach, board chairs and other opinion-leading directors scour their networks to find someone who has the right capabilities and time to sit on their board. This traditional approach at times ensures that boards are filled with like-minded individuals, people who see the world in the same way and are less likely to consider new perspectives or points of view about how a company should be operating. Additionally, these directors may not represent their customer community.”

Related: Executive Search Firms Adapting to the New Normal

“I’ve had a lot of people suggest to me that while this approach may not promote the goals of diversity, it’s certainly worked fine for many companies of all sizes Mr. Hewat said. “The results of this approach are predictable and comfortable. There is often greater harmony on boards that are staffed this way – but there is also a tendency towards groupthink and a risk of being blindsided by issues that can be missed if everyone has similar life and corporate experience to draw upon.”

Related: Jensen Partners Launches New Platform to Address Diversity Hiring

“However, as we know, there is a growing body of evidence to show that greater diversity in board composition and the ranks of senior management is strongly related to how well the organization is viewed by the market and to profitability,” he said. McKinsey, (one of many highly regarded firms to have done so) has conducted deep research in this area, and in its diversity analysis found that companies with greater gender and ethnic diversity are significantly more likely to outperform companies that lag in diversity. Additionally, social imperatives are driving a new-found urgency on the diversity challenges. Black Lives Matter and, more recently, the racist attacks on people of Asian descent in Canada and the U.S. have contributed significantly to this resolve.

The “Expert” strategy, for its part, involves retaining an executive search firm to help you with your board recruitment. “As we’ve shown with the CBHF example, a professionally managed executive search will uncover unconscious biases within the nominating committee, set and follow a rigorous process, and work hard to bring forward talent and expertise that would otherwise have flown under the radar of most boards that rely solely on their own limited networks,” Mr. Hewat said. “A search firm will strategically access a broader pool of talent and can also be the difference in helping someone from an atypical business background see possibilities and opportunities they might have otherwise underestimated or missed altogether, or perhaps most importantly, and impactfully, accessing a group of people that may not normally be approached for a board or even consider being on a board.”

Related: Canadian Executive Search Market Recovery Expected by Second Half of 2021

Mr. Hewat recalls recruiting a woman who had deep experience serving on the boards of large financial institutions. He thought she’d be the perfect candidate for a small publicly traded software company. Yet she was very reluctant given that her background was in financial services, not software.

“We had a number of conversations that enabled her to think differently about how she could contribute to a sector that was unfamiliar to her,” he said. “Her background, thought processes and openness to contributing differently had a significant impact on this software company with a specific emphasis on promoting women in tech. She joined the software company board and the overall experience has been hugely rewarding. In addition to bringing a thoughtful, new perspective to the board, she has also contributed significantly to support women in management within the company, making it a more attractive place to work in a very competitive sector.”

That’s really the key to this diversity challenge, according to Mr. Hewat. “It’s helping organizations see beyond today’s needs and then matching the right companies with the right people who, in many cases, might never cross paths with each other,” he said. “Taking a DIY approach to this endeavor is very challenging. Finding a potential director outside the realm of usual suspects takes planning, broad knowledge/access across many different professions and industries, and an ability to convince reluctant superstars to consider unfamiliar, but ultimately rewarding, and high-impact challenges.”

Related: Recruiters Up Their Game in Diversity

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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