As companies worldwide begin to recognize the need to bring new perspectives and skill sets into their boardrooms, a U.K.-based nonprofit is striving to widen the pool of board-ready candidates to increase diversity.
The organization, called Board Apprentice, helps individuals get their foot in the boardroom door, providing them with the kind of experience that directors seek. Apprentices are paired with a company’s board, where they sit for a year, in order to observe and learn from the board and gain insight into how boards operate.
The organization is currently matching apprentices to boards in the U.K., Switzerland, Jersey, Guernsey and, most recently, in the Cayman Islands.
At Ernst and Young’s Global Hedge Fund Symposium on Dec. 10, EY partner Jeff Short announced that the company will be a sponsoring firm for Board Apprentice in the Cayman Islands.
Speaking on a symposium panel moderated by Short, EY Hedge Fund Market Leader Natalie Deak Jaros said the Board Apprentice initiative “is very much in line with our principles as a firm as it relates to diversity and inclusiveness.
“When we look at the composition of our teams, when we go out to serve our clients, we have clearly found that diverse teams with a very strong element of inclusiveness, they’re more thoughtful, they’re more innovative … better able to exceed our clients expectations,” Jaros said.
Her assertion is backed up by data which shows that more equality in the workplace – and the boardroom – has a tangible and significant impact on a company’s economic competitiveness. For example, studies show that gender balance on boards results in a better share price and financial performance for companies. One such study, included in EY’s “Women. Fast Forward” report released last year, found that from 2005-2014, boards with a higher-than-average percentage of women outperformed those with fewer than average by 36 percent. It also found that companies with women board members outperform those without women members in return on equity, net income growth and price-to-book value.
EY has been particularly focused on addressing the issue of gender parity in the workplace. It’s “Women. Fast Forward” report, a survey of 400 company leaders worldwide, was commissioned in response to an October 2014 report from the World Economic Forum that predicted it would take until 2095 to achieve global gender equality in the workplace. According to Jaros, EY said, “that’s just too long,” and began to commit itself to focusing on efforts to speed up the time line.
The aim of Board Apprentice is in line with EY’s objective of addressing gender parity. The “Fast Forward” report identified three key steps organizations can take to help accelerate the path to leadership. First among those is that companies must work harder to make the path ahead clear to women, to show them possible career opportunities that might be available to them in the future. By getting women boardroom experience, and ultimately helping them get on boards, Board Apprentice does just that, illuminating the path to leadership.
Board Apprentice founder Charlotte Valuer, who is managing director of GFG Ltd, a governance consultancy, believes it’s important to diversify boardrooms, as diversity trickles down from the top.
“As leaders we should be showing the way by having the equality at the top and it will filter on the way down,” Valeur said at the symposium panel.
Equality does not just mean gender parity, she said.
“When you say ‘board diversity’ to people, they often think that it is about women and men,” Valeur said. “It is about that, but it is also about getting the right people on the board … to ensure that whoever you put there is able to support your business and be a good part of what you do.”
That is why Board Apprentice also works to diversify boards to include candidates of different ethnicities, cultures, ages and skill sets.
“The board has got to be able to see with all eyes,” Valeur said.
One example she offered was a disastrous decision made by the board of video-lending company Blockbuster. The company’s board could have purchased Netflix. They did not, and Blockbuster wound up filing for bankruptcy in 2010. According to Valeur, had the company had younger people on their board with the vision to recognize where the market was heading, that decision could have been different.
That’s why Board Apprentice is about more than just getting a token woman or minority onto the board; it’s about bringing in new perspectives that can help companies make more informed decisions.
“From my point of view, it’s not just about doing the right thing,” Valeur said. “It’s really looking at what it is also doing for us in terms of support, helping the businesses develop in the way that it should be developing. The broadness of their experience will help you with that.”
Board Apprentice is a passion project for Ms. Valeur, who had been sitting on boards for about five years when she came up with the concept of an apprenticeship program.
“We kept having issues about finding the right kind of directors,” Valeur said.
While she pushed for diversity, individuals with new skill sets and ethnic minorities, the “pushback” she got from directors was “they don’t have the right experience.”
“I thought, well we can give them that,” Valeur said. “Why don’t we take on one person who we think has all the qualifications to sit on a board except that piece of active board experience, have that person sort of serving on the board for a year.”
Board Apprentice candidates are screened for suitability by the organization’s selection committee, and boards can elect to adopt whomever the organization assigns to them or can choose from a shortlist of three (the selection and short lists also reflect input from the board.
The apprentice sits on the board but does not participate in the board’s decision-making, to eliminate any appearance of a shadow directorship. Their role is simply to listen and learn. Apprentices also have access to recognized governance workshops alongside existing non-executive directors during their apprenticeship, and have a specific mentor from Board Apprentice Ltd, who is experienced in governance.
Currently, Valeur said, the organization has paired 40 boards with apprentices worldwide.
“We need to take responsibility as leaders,” Valeur said. “Lead by making sure you develop the people sitting in that chair after you. If you have a board and you don’t care who sits in that chair after you, you don’t deserve to sit in it in the first place. That’s my view.”