Board composition discussions about diversity tend to focus on ensuring an appropriate ethnic and gender mix. But boards also should strive for diversity “in thought” to ensure a healthy way to challenge the status quo and help trustees view issues through a new lens, according to the authors of a recent article in Financier Worldwide. Diversity should be embedded in “boardroom thinking, ideas, actions and composition,” the article’s authors wrote. (“Unleashing Valuable new perspectives in the boardroom,” Financier Worldwide, May 2015)
Board composition should include both men and women from diverse backgrounds and also from different perspectives. Bringing new perspectives to both old and new issues encourages existing directors to see issues in new ways. Some of these issues may be, for example, reputational risk, business model disruption and technology challenges such as cyber security. These new board members can help the board advise management, oversee risk and address community interests.
When identifying new board candidates, consider expanding beyond the traditional picks—high level executives of leading companies in the community or communities—to include business unit heads, regional leaders, academics, entrepreneurs, government leaders and other non C-suite executives. Try to find skill sets and experiences that connect to the trends shaping hospital/health system business practices such as accountable care organizations and bundled payments (i.e., capitation, risk, etc.), cyber security issues, technology implementation and consumerism.
Generational diversity should not be overlooked. GenX and Millennial consumers have different attitudes, priorities and expectations; their voices should be heard in the boardroom, and not just as part of an “advisory group.” The authors of the article noted, “There is a great and largely untapped opportunity for boards to seek younger directors to gain perspectives of a generation that is redefining technology, consumer preferences, business strategy, business models and even business risk.” (“Unleashing Valuable new perspectives in the boardroom,” Financier Worldwide, May 2015)
Ultimate Goals of Boardroom Diversity
Taking a few important steps can facilitate bringing new perspectives into board conversations to drive innovation and value:
Comprehensive orientation/onboarding program: This helps break down the barriers to new board membership, or “barriers to integration.” These barriers can occur when, for example, a new board member is the sole voice on an issue, or is the only trustee without relationships or ties to other board members, or when he/she is from an underrepresented group or function.
It is important to create an environment “that encourages innovative thinking . . . one that welcomes new perspectives from directors who may have been brought in for that purpose.“(“Unleashing Valuable new perspectives in the boardroom,” Financier Worldwide, May 2015)
Uses of technology: To remain current with the market, directors should consider monitoring social media to understand how the community views the hospital/system. The board should use dashboards to assess internal data. Analytical and brand monitoring tools to help strengthen risk-sensing capabilities are also being introduced to boardrooms to help in the traditional oversight responsibilities.
A well-functioning board relies on trust among its members. Embracing diversity of thought and investing in new processes and tools will encourage more dynamic boardroom discussions and a better understanding of immediate and future change.
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