WHAT 2020 GOT RIGHT: DIVERSIFYING BOARD LEADERSHIP IN RETAIL

2020 has witnessed major retailers leaning into their brands’ core values and diversifying their boards 🙌🏽🙌🏾🙌🏿

Diversity is key and industry leaders and institutions are starting to act.

“Smart companies won’t wait. Forward thinking companies conscious of the social imperative will begin instituting their plans for inclusion straight away making diverse boards the norm.”

Let’s end this year on a high note. For a moment let’s explore that delicious space where research and practice intersect harmoniously. 2020 has witnessed major retailers leaning into their brands’ core values and diversifying their boards. Key examples, October 2020 saw Ralph Lauren adding Valerie Jarrett to their Board and this month, Starbucks elevated Melody Hobson to Chair. Not only are these positive moves embracing the growing multicultural heterogeneous customer base, but the decisions are also supported by the latest research that speaks to long-term sustainable gains. In short, it’s the classic win win.

THE NUMBERS

Despite our diversity, representation on corporate boards remains strikingly low. According to a 2019 Forbes article, roughly 17% of board seats were held by women and only 15% by those who self-identified as minorities. Looking at gender diversity alone, the U.S. numbers are considerably lower than countries that mandate participation in board leadership who experience 44% female board participation in Iceland and 39% in Norway.

Beyond the numbers, there is a definite business case to be made for having diverse corporate leadership. In a July 2020 Harvard Law School Forum quoted Ronald P. O’Hanley of State Street Global Advisors, “in a more complex, innovation-driven environment, embracing a diversity of thinking, competencies, and backgrounds is a business imperative.”

It’s true - from supply chain to omnichannel to evolving customer tastes and expectations − retail is changing. Its very complexity is requiring the industry to include diverse perspectives, multicultural voices, and decouple from the status quo in an effort to delight today’s customer and continue to expand the base.

Fortunately for retail, this is a case where the numbers have informed policy in a way that has affected a change in how business is done. Industry leaders and institutions are starting to listen.

NASDAQ’S BIG MOVE

It’s likely that the momentum to diversify boards will only increase as organizations like Nasdaq look to require inclusion. In a December 2020 article, Nasdaq head Adena Friedman outlined their goal of seeking SEC approval to “require boards to have at least one woman and one director who self-identifies as an underrepresented minority or L.G.B.T.Q.” If approved, the proposal would require all companies listed on the U.S. exchange to comply resulting in a minimum of two diverse directors for each board.

This is a game changer. By normalizing inclusion, making it a standard operating procedure for the strongest companies - they, in turn, set the clear example for others. By its own estimate, Nasdaq estimates that it will take approximately two years for the proposal to go through the approval process. Smart companies won’t wait. Forward thinking companies conscious of the social imperative will begin instituting their plans for inclusion straight away making diverse boards the norm.

2020 has been a difficult year for so many, and understandably, there has considerable focus on what went wrong. At The MAS Project, we wanted to take the opportunity to celebrate something that went right and yielded positive momentum. We encourage effective leadership, and decision making that better enables retail to authentically reach the diverse and growing multicultural consumer base. Inclusive board leadership is a meaningful way to enhance the voice of multicultural customers, and brands, as well as provide an added dimension to the strategic direction of the retailers and companies we love.

We applaud this important step in the retail industry’s multicultural journey. We only ask that now as diverse leaders are coming to the table in increased numbers, adding their voices to the conversation, we encourage retailers to please listen.

About the author: Cofounder of the MAS Project, Brenda McKenzie loves building community and brands. An explorer by nature, she revels in finding what’s unique and sharing it with the world. This life-long learner brings 25 years in sustainable community & economic development, retail entrepreneurship, and global affairs to the mix.