Boards of Directors

Recruiting for a Diverse and Qualified Board

Toft Group leverages their extensive and deep referral network to identify a diverse slate of Board of Director candidates who will help your company reach the next level.

Toft Group gives clients an edge by strategically identifying highly qualified, diverse Board of Director candidates who will amplify your company’s values, culture and business objectives. Companies with diverse boards are proven to be more innovative and to have improved financial performance. In fact, companies with female CEOs financially outperform those with male CEOs on Wall Street.  Additionally, companies with diverse boards and executive teams are attractive to candidates seeking new employers. Diversity will help you navigate the talent crisis, attract the best and the brightest employees.

Too often, corporate leaders identify prospective Board of Director candidates by tapping into their own personal networks, thinking back to successful executive colleagues from current or prior business ventures. To date, statistics have shown that over 70 percent of Board seats have historically been filled without the use of search firms, with only 30 percent of companies – both public and private – having conducted a thorough search.

Toft Group has the network you need to run an efficient, thorough process, and to identify one or more outstanding female leaders. Over 40 percent of Toft Group’s placements are women into leadership positions.

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Qualified diversity candidates

Given the new board diversity requirements signed into law by Gov. Jerry Brown in California, leveraging an executive search firm that has a large network of diverse candidates will become the new normal nationwide. As of October 2018, all listed companies headquartered in California are required to have at least one woman on their board before 2020. (The number increases to two by the end of 2021 for companies with a five-person board, and three women for a six-person board.) With the right search firm involved, achieving California’s new gender diversity mandate with high quality female executives IS in fact possible. Qualified diversity candidates that are in high demand, it is imperative to look beyond your immediate network.

Below are some recommended steps companies can take to find and hire new directors that are counter to traditional practices:

Conduct your search more strategically. Most corporate directors rely upon “word of mouth” and personal networking to find candidates. Male executives often invite their friends to join Boards—but male leaders must expand their networks to attain diversity. Try pushing your recruiting team to work harder to identify a diverse pool or and consider hiring an executive search firm to expand your network.

Increase your list of contacts. Every CEO should be challenged with the following question: Do you have at least two qualified women in your contacts database that you could consider for your board? If not, reimagine how you go about building that your network. Consider new or atypical networking events, such as an executive awards event geared to a more diverse crowd. The “Forbes Under 30 Summit” is a great example of an event that may seem irrelevant to a seasoned executive, however could be an exceptional place to expand a list of contacts – because as with gender, age and ethnic diversity should also be prioritized. Note that women are a diverse set themselves – in age and ethnicity – and they are over 50 percent of the population. Hiring women can achieve your goals for diversity in parallel, balancing the disparity around the boardroom and executive table.

Think differently about who is “qualified” to serve on boards. We need to dismiss the notion that only former public company CEOs can become directors. Operations, finance, R & D, or commercialization leadership experience can be extremely beneficial for the right stage company. Given the push for diversity, we think Board appointments will continue to be reviewed through a new lens, one that is less about prior CEO or Board experience; but rather focused on achievements, aptitude, network connections, and personal experience.

Don’t lower the bar, make the bar flexible. Performance is not going to change — Board members, male or female, will be evaluated on performance. Highly qualified women exist all around you. We often see companies struggle with this concept of reconfiguring their “ideal candidate” whether it’s at the Board level or executive level. Companies that embrace a creative, flexible strategy to recruiting will win.

Demand a diverse pool of candidates for every hire. By using an executive search firm, you can dictate what diversity parameters you’d like to set in a search. Don’t even start interviewing until you’ve gathered that diverse pool of candidates. If your in-house team or recruiting firm presents you limited options for diversity, push them to bring you a pool of candidates that is representative of the population you serve.

Keep in mind that recruiting for your team is even harder than recruiting for your Board. Today’s market is “candidate driven” and the choice of where to work is in the candidates’ court. Women typically choose companies with women around the table. In our experience, once a company has several women on their board or executive team, the ease of recruiting more diversity is clear.

Together, we can build a 50/50 workforce for the next generation.

Learn More

Biotechs Among Most Impacted by Law Requiring Women on Boards

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Boards Must Diversify: The Only Way Is to Look Beyond Your Network

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Board Diversity from a Man’s View: 5 ‘Habits’ That Need to Change

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Footnotes

Diverse Boards

  1. https://www.oecd-forum.org/users/42282-mary-goudie/posts/31011-success-and-society-why-diverse-boards-make-better-decisions
  2. https://directwomen.org/report-finds-diverse-boards-perform-better
  3. https://www.catalyst.org/media/companies-more-women-board-directors-experience-higher-financial-performance-according-latest

Female CEO Companies

  1. http://fortune.com/2015/03/03/women-led-companies-perform-three-times-better-than-the-sp-500/
  2. http://fortune.com/2017/08/01/female-ceo-stock-returns/
  3. https://www.marketplace.org/2017/08/17/business/corner-office/women-ceos-outperform-men-why-arent-companies-top-job

Diverse Executive C-Suite Companies

  1. https://hbr.org/2018/07/the-other-diversity-dividend
  2. https://www.forbes.com/sites/karstenstrauss/2018/01/25/more-evidence-that-company-diversity-leads-to-better-profits/#6fabe0c41bc7
  3. https://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters