Top Takeaways: Bringing Diversity & Inclusion to Portfolio Company Boards

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Bringing Diversity & Inclusion to Portfolio Company Boards: What Can Be Done?

This webinar brought to light several of the issues related to diversity and inclusion in the PE and VC space and gave practical advice on how to improve female and POC representation on portfolio boards. Moderator Heather Gates of Deloitte thoughtfully guided an experienced panel of industry leaders through a series of probing questions that covered everything from the importance of board diversity and how firms are working to attract diverse board members to the current DE&I trends and how the “I” in DE&I, inclusion, is really being addressed. The recurring theme of the webinar was the importance of setting aspirational targets and being intentional. The good news is, with targets and intention, the numbers of women and POC on boards are on the rise!

Panelists Kara Helander of The Carlyle Group, Paula Judge of Accel, Ann Shepherd of Him For Her and Bessie Watts of OneVista acknowledge that there is still work to be done, but they are optimistic about the future of our boards. The external environment, the networking and sharing of candidates, the sense of hope and the existing momentum are all creating ground swell that can’t be stopped.

Some of the top takeaways from the webinar are highlighted below, but there is so much more depth to be found from listening to the women of the panel. Do tune in to hear from the women themselves about the impact and issues surrounding being the “ONLY” – that is the only woman on a board – as well as how board candidates are being more intentional and discriminating in evaluating potential board opportunities, doing deeper assessments of companies and founders and being thoughtful about the value they might add to a board when considering which board seats to accept. Listen with a slight smile as one panelist shares the image of a founder scratching his head trying to comprehend that someone might turn down the offer of a seat on his board.

Top 5 Key Learnings:

Having a diverse board is critically important to the success of a portfolio company. Not only does a diverse board offer new insights, different perspectives and creates value, but it leads to operational excellence and better outcomes. One presenter shared that her firm’s portfolio companies with diverse boards see an average annual earning growth 12% higher than those with homogeneous boards.

Measuring diversity statistics matters and setting aspirational targets really does help drive behavior. For example, one firm set a goal for U.S. portfolio companies to have at least one diverse director on the board of each of their controlled companies within two years of ownership. At the time the goal was set, only 38% of the boards met that goal. Now, six years later, 88% of the boards meet that goal.

Companies are focused on attracting diverse board candidates. Founders are more politically active and socially conscious than ever and they are demanding diversity. There is far more sharing of pipeline and potential women and POC board candidates now compared to ever before.

Board candidates are asking different questions and thinking differently when considering board positions. Women and POCs don’t want to be a token on the board; they are asking for more clarity on the competencies that the board is seeking to bring in. Candidates are going one step farther to look for clues on the board’s decision making processes and the board’s behavior in an effort to evaluate their inclusiveness. We are now seeing potential candidates assessing board invites as if they are operating opportunities.

Inclusion is hard to measure and it isn’t being considered as much as diversity and equality. COVID and the resulting virtual approach to business are exasperating the issue of inclusion. But more importantly, it is very hard to have inclusion when you are an ONLY. Adding more than one diverse board member not only improves the issue of inclusion, but one panelist shared that her research showed that each additional diverse board member correlated to an additional 5% annualized earnings growth.

We thank all of our webinar presenters for sharing their time, their experiences and their wisdom with us.

Webinar Presenters: 

  • Kara Helander, Managing Director and Chief Diversity, Equity and Inclusion Officer, The Carlyle Group
  • Paula Judge, Vice President of Talent, Accel
  • Ann Shepherd, Co-Founder and Chief Operating Officer, Him For Her
  • Bessie Watts, Director, External Board of Directors Program, OneVista
  • Heather Gates, Audit and Assurance Managing Director and Audit and Assurance Private Growth Leader, Deloitte (moderator)

PEAK members can view the entire webinar here. Not a PEAK member yet? Contact us to learn more: Request More Information

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