A Difficult Conversation: Corporate Directors on Race and Gender

The following post comes to us from Lissa L. Broome, Wells Fargo Professor of Banking Law and Director of the Center for Banking and Finance at the University of North Carolina School of Law, John M. Conley, William Rand Kenan Jr. Professor of Law at the University of North Carolina School of Law, and Kimberly Krawiec, Kathrine Robinson Everett Professor Law at Duke University Law School.

This post summarizes our ongoing ethnographic research on corporate board diversity.  This research is based on fifty-seven interviews with corporate directors and a limited number of other persons of interest (including institutional investors, executive search professionals, and proxy advisors) regarding their views on race and gender diversity in the boardroom. Our overall conclusion is that, while everyone we have spoken to endorses diversity in the abstract, very few have been able to tell us why it matters. In fact, pushing the topic has yielded difficult and sometimes uncomfortable conversations.

Using a method rooted in anthropology and discourse analysis, we have worked from a general topic outline and conducted open-ended interviews in which respondents are encouraged to raise and develop issues of interest to them.  The interviews range from forty-five minutes to two hours in length and each interview is taped and transcribed.  As a group, we then listen to each taped interview at least once with transcript in hand, analyzing each interview qualitatively with a focus on the themes that the respondents identify, the emphases given to these themes, the stories (or narratives) that they tell, and the details of the language that they use. We also thematically code the transcripts and use sorting software to get another, complementary view of the frequency and distribution of the various themes.

As we discuss at length in other published work, there are numerous tensions in directors’ accounts of race and gender in the boardroom. In this essay, we discuss what we view as the central tension in our respondents’ views on corporate board diversity – their overwhelmingly enthusiastic support of board diversity coupled with an inability to articulate coherent accounts of board diversity benefits that might rationalize that enthusiasm.

It is worth noting at the outset that the justifications for board diversity put forward by our respondents fall into the general category of “diversity is good for business.” Most often, our respondents’ business justification for board diversity emphasizes changes in the way that the board operates or interacts with each other, or improvements in board processes or decisions.  Some respondents, however, also assert that board diversity improves the corporation’s dealings with employees and other constituencies, such as shareholders, regulators, or the general public. Respondents only rarely provided ethical, fairness, or other social policy justifications for board diversity and, even then, often also emphasized the business case for board diversity.

Our respondents expressed nearly universal support for board diversity in the abstract.  Most respondents found it difficult, however, to articulate clear reasons for that support. For example, many respondents, when pressed for specific accounts that illustrate the benefits of board diversity invoked what we term “trivia” – stories of contributions by female or minority board members that seem far removed from typical board decision-making areas.  For example, we heard stories about the restaurant habits of black families, about women’s safety concerns regarding the location of bank ATM machines, about female diners’ preferences for low-calorie foods, and about the use of gender-neutral language in corporate reports.  Each of these topics seem far removed from the strategic planning and oversight that is presumably the normal stuff of boardroom discussion. All this is information that could have been provided by lower level marketing or consulting professionals.

Another set of stories focused on more substantial contributions of female and minority directors, yet the contributions were unrelated to race or gender. These narratives praise the abstract value of race or gender diversity. But the ultimate focus turns out to be a particular skill set or background experience, not necessarily connected to the director’s race or gender, that proved valuable – for example, organizational skill gained through high-level military service (an African American male), or engineering (a white female), regulatory expertise (an African American female), or being a “novice” to the boardroom (an African-American male).

Our respondents’ reactions make clear that frank dialogue about race and gender – even a seemingly benign discussion of diversity’s benefits – can be a difficult conversation.  Such conversations involve pointing to ways in which people are different because of their race or gender, and that is not a conversation with which most of our respondents – indeed, most people – feel comfortable. Perhaps that is, in part, because advocates for equal workplace opportunities have invested in precisely the opposite argument – that women and minorities are not different from white males in ways that matter from a business perspective.

Perhaps the conversation about race and gender diversity in the boardroom is difficult because it reflects a fear of saying that people of diverse demographic backgrounds are different in some meaningful way. Those who are not members of traditionally unrepresented groups do not want to be seen as stereotyping or essentializing by identifying particular unique attributes of members of those groups.

At the same time, those who are members of the traditionally unrepresented groups have an interest in presenting themselves as being selected for board service because of their professional merit without regard to their gender, race, and ethnicity. Thus, neither group is comfortable discussing potential differences between men and women, between blacks and whites, or between Hispanics and non-Hispanics. As a result, though our respondents assert that diversity matters because female and minority directors bring something “different” to the table, they are uncomfortable with discussing in any detail what those differences are.

But denying difference may be dangerous as well. If there are no relevant differences between women and minorities and white males in the boardroom, then why are women and minorities not more equitably represented on corporate boards?

While conversations about diversity in the boardroom may be fraught with ambiguity, the numbers are not: the corporate boardroom remains an overwhelmingly white, male club.  Whether or not the representation of women and minorities on boards will increase in the future remains to be seen.  Many of our respondents were optimistic that times were changing, but – perhaps not surprisingly – had few concrete predictions regarding when, and how, that change would come.