The primary role of a governance board is to provide stewardship and direct support to the executive team to ensure that corporate affairs are being conducted in a way that achieves established strategic goals and objectives. This stewardship also requires legal responsibilities and obligations as outlined in articles of incorporation, bylaws, and applicable federal/state/municipal laws and regulations.
The EDI Board Core Competencies featured in this article highlight only a few of the fiduciary responsibilities applicable to a cross-sector of governance boards. They are not specifically relevant to any one type of industry, line of industry, or corporate model. They are based on a larger and broader set of core leadership competencies that seem to consistently appear in various other leadership development models, courses, or articles and are re-examined and re-framed here through an equity, diversity, and inclusion (EDI) lens.
These skills support the ability of board members to remain committed to advancing the organization’s primary purpose for existence and incorporating related values into its decision-making framework. Bringing an EDI lens to these competencies means developing and strengthening relationships with community stakeholders that are currently underrepresented by expanding or diversifying board composition. An EDI lens also requires the board to explore and revisit how its overall governance/business ethics frameworks can be informed or strengthened to positively impact all stakeholders. Mission-driven competencies skills specific to EDI may include:
- advocacy: the responsibility and commitment to speaking, acting, and serving on behalf of others effectively, with integrity, and with one voice.
- business ethics: a shared moral framework that governs how a board operates, how governance decisions are made, and how all its stakeholders are treated. An EDI lens naturally informs business ethics because it presupposes that equity, diversity, and inclusivity are part of that moral framework.
- community engagement: the process of working collaboratively with community stakeholders to address issues that impact the wellbeing of those groups. Corporate boards that are committed to advancing racial equity, and prioritize EDI and community engagement as a both a core competency and business strategy.
Financial Management Competencies
These skills support the ability of governance boards to review, understand, and interpret an organization’s financial position. An EDI lens becomes even more relevant when commercial acumen is considered part of a board’s fiduciary responsibilities. As shifts in stakeholder and customer demographics continue, commercial acumen at the board level will require looking forward and positioning the organization for stakeholders over the next five to ten years. EDI recruitment efforts are oftentimes abandoned or “watered down” because otherwise strong candidates do not possess traditional financial oversight skills. Yet, financial oversight training during the orientation and onboarding process can readily address this issue. Recruiting board nominees for their commitment, experience, and EDI lens supplemented with training for one or two skill sets is a much more attainable goal:
- commercial acumen: the board’s ability to understand the relationship between a company’s fiscal behavior and current/future marketplace demands. An EDI lens can be particularly insightful and impactful to the board’s commercial acumen.
- risk management: the practice of a governing board of identifying potential risks in advance, analyzing them and taking precautionary steps to reduce/curb the risk. A diverse board with diverse experience will ask diverse questions oftentimes critical for anticipating and managing risk.
These skills refer to the board’s collective skills, knowledge, experience, and mindset to support and lead executive teams through quickly changing environments while maintaining focus on key strategic goals. An EDI lens is meaningful and relevant in order to fully support current and emerging diverse leaders, especially leaders of color. The data already points to a quickly changing workforce and with it many more leaders of color. Leadership skill sets that can be significantly informed by an EDI lens include:
- strategic thinking: the board’s ability to collectively anticipate, challenge, interpret, and decide on behalf of its stakeholders. An EDI lens allows for strategic dots to be arranged, connected, and interpreted differently.
- conceptual thinking: understanding abstract relationships, developing ideas, and solving problems creatively in support of organizational goals and executive staff. Beyond demographics, an EDI framework requires strong conceptual thinking skills.
Knowledge/Data Management Competencies
These skills refer to the board’s collective process of capturing, distributing, and effectively using information for the purposes of creating value and meeting strategic and tactical goals. This is perhaps the least often discussed board competency that is most impacted by EDI. Building a diverse board that fosters inclusive discussions and decision-making practices can identify gaps in current data or reveal new interpretations of the data. As risk management evolves to include a company’s credibility and brand, an EDI lens becomes increasingly important:
- data-driven decision making: the board’s commitment and approach that values decisions that can be backed up with verifiable data (quantitative or qualitative), rather than making decisions that are intuitive or based on observation alone. An EDI lens can inform what information is presented to the board and provide additional or more nuanced interpretations.
- risk management: Although Risk Management is often associated with financial risk. In the healthcare industry, these risks extend to clinical outcomes, patient retention, and medical malpractice claims.
These skills refer to the board’s commitment to foster open communication, speak truthfully and with one voice for the purposes of positively influencing an outcome, impact, or effect. An EDI lens will prove to be increasingly valuable with a board’s collective communication competencies. Board diversity will increase its ability to understand new perspectives, ideas, and personal stories. In doing so, relationships across stakeholders will significantly improve because of increased empathy. Strong communication competencies inherently incorporate an EDI lens:
- listening and speaking: these core skills require seeking out new, additional voices and withholding judgment especially when faced with differing points of views or hearing new perspectives. Subsequently, a board’s collective speaking skillset (verbal or written) reflects new ideas or stories and align with the organization’s overall mission, goals, and brand.
- networking: the board’s collective efforts to develop and use its professional relationships in a way that builds and strengthens alliances in service to the organization’s work and goals.
- empathy: the ability to identify and understand another’s situation, feelings, and motives. It’s the capacity to recognize the concerns other people have. Empathy at the governance level can help better predict the effect board decisions and actions will have on stakeholders/customers and strategize accordingly.
Governing boards that will be engaging in specific board recruitment and diversity initiatives are encouraged to regularly discuss their overall board composition and collective competencies as they pertain to their specific needs and longer-term goals. A commitment to an EDI lens at the board level is not a one-time conversation or event. It requires robust, open, and constructive conversations about the overall composition of the board — its current composition and the vision for its composition one, two, or five years from now. Like every other new and strategic initiative that rises to the board level, conversations about EDI will not always be easy. Conflict and tension may arise. Address it as you would any other conversation or initiative deemed important and critical to the board’s core responsibilities and goals — honestly, respectfully, and openly. Discussions about the board’s collective skill mix and potential blind spots based on its current membership is a good place to start. Keep in mind that bringing an EDI lens to fiduciary responsibilities may also require re-assessing structural and cultural issues in order to get the right mix of diverse skills and experience among current and future board members if it is to successfully navigate the challenges and opportunities anticipated in the next three to five years.