Achieving Societal Equality by Building Inclusive Corporate Boards

Abstract

Leadership diversity promotes inclusive decision-making, innovation, and sustainable performance. This chapter examines the relationship between corporate board diversity and social criteria under the environmental, social, and governance (ESG) framework, emphasizing gender parity on boards. ESG data are linked to one-fourth of the world’s professionally managed assets, worth $20 trillion (Eccles et al., 2019). Despite progress, less than 20% of corporate boards worldwide include women (Deloitte, 2021). Social psychology’s conformity theory describes how group dynamics affect individual behavior. Minority views are not easily expressed or heard in groups as social constraints favor conformity with the majority’s viewpoint (Asch, 1955; Glass & Cook, 2017; Yarram & Adapa, 2021). When a group encounters persistent minority viewpoints from multiple individuals, it is more likely to consider and learn from the minority voice (Asch, 1955). Decision-making and problem-solving increase when a board has diverse perspectives and critical mass can contribute to normalizing diversity on boards removing communication impediments. In the context of corporate board diversity, this theory can be applied to address diversity challenges, improving decision-making and problem-solving. To promote board diversity and inclusion, we developed BOARDS, a six-step process to assist current boards on increasing their capacity for inclusion. Our four-step process SKIM can be used to prepare potential board members for future opportunities. This chapter underlines the necessity to eliminate diversity gaps on corporate boards to develop a sustainable model of social equality to build inclusive corporate boards. Future research should consider other diversity variables including age, sexual orientation, and cultural and language diversity.

Citation

Perham-Lippman, K., Caldwell, Y. and Richards, T. (2023), "Achieving Societal Equality by Building Inclusive Corporate Boards", Barnes, J., Stevens, M.J., Ekelund, B.Z. and Perham-Lippman, K. (Ed.) Inclusive Leadership: Equity and Belonging in Our Communities (Building Leadership Bridges, Vol. 9), Emerald Publishing Limited, Leeds, pp. 167-176. https://doi.org/10.1108/S2058-880120230000009015