Reaching for diverse business boards
Business consultants and various academic studies tell us that having diverse business boards is good for the bottom line and helps organizations attract and retain a diverse array of top talent. Yet women and others are still underrepresented on corporate boards, and that disconnect is a prime reason why TEMPO Madison, a 250-member peer-to-peer organization for professional women, launched Project REACH, an initiative to increase the number of its members on business boards.
The initiative, a three-year effort (2019–2021), is not just about making business boards more diverse, it’s about making business boards better by making them more diverse and perhaps creating a template for other professional women’s groups to follow in helping their members pursue board service.
Those leading the initiative have a high profile. Kristine Euclide, currently board chair for WPS Health Solutions, and Kim Sponem, president and CEO of Summit Credit Union, are the project co-chairs. They lead a steering committee that includes Donna Beestman, Beth Bennett, Kathy Blumenfeld, Theola Carter, Sue Anne Kaestner, Kelda Roys, and Shana Lewis.
To gauge the progress Project REACH is making during the pandemic, we interviewed Euclide and Lewis, who indicated the project has remained on track with the help of the same technology tools that have keep the rest of the economy afloat. Even though the planning phase of the initiative is only about two-thirds of the way complete, one program participant has been named to a business board and more are expected to follow.
Several project leaders already have business board experience. Euclide, a former managing partner at the Stafford Rosenbaum law firm and the former senior vice president and general counsel at Madison Gas and Electric, is not only the board chair for WPS Health Solutions, she also has served on the MGE Foundation Board and on community boards at the local and state level.
Lewis, a shareholder with Strang Patteson Renning Lewis & Lacy, is the immediate past president of the TEMPO Madison board. She represents private and public-sector employers in labor and employment law matters.
Reaching in phases
Project REACH has unfolded in two phases. The first phase was more of an educational segment where the steering committee gathered background information on its members. In 2020, it conducted three workshops to prepare members who were interested in business board service, and this past fall it put together an action plan for phase 2, where the focus is on making connections between businesses interested in board diversity and the TEMPO members who are interested in and qualified for board service.
“That’s the phase we’re entering right now,” Euclide says. “In a pandemic, it might be a little harder to make those connections, but actually to date, we’re pretty much on track.”
According to Lewis, Project REACH had hoped to schedule in-person roundtables and other networking events with TEMPO members and those who are filling board positions but pivoted to hold those in virtual settings. “We do look forward to possibly, in the next year or so, holding those in-person networking events,” Lewis says, “so that our members have the opportunity to mingle with those individuals who are recruiting and vice versa.”
Among the tasks Project REACH is undertaking is teaching board candidates how to write a “board bio,” which is typically a single-page document that serves as a prospective candidate’s introduction to corporate boards. Euclide and Lewis view the bios as an important first step because a lot of TEMPO members don’t realize how qualified they are for board service until they sit down and start writing their bios. “That’s when they really see that they have done all this stuff, and it really does set them up for board service,” Euclide states, “but you must have a document that really demonstrates it for everybody.”
The idea is not just to have a bunch of bios available on a database but to take the next step of making those connections with the business community. “Creating the bios is a first step, but it’s not the only thing, and that’s one of the reasons that we are focusing on phase 2 connections,” Lewis says. “We recognize that most boards fill their vacant positions by word of mouth and by networking and making connections. So, we’re making sure that our members have access to decision-makers — those people who are in fact putting the boards together and filling board vacancies — after they have accomplished that first step of creating their board bio.”
TEMPO Madison has compiled a list of business groups it would like to make diverse connections with, including local chambers of commerce and various business leaders. “We want to start with that portfolio, and we have seen a great deal of interest already,” Euclide says. “We have a great data set and then some of the next steps will actually be getting out in the business community and meeting and talking with business leaders.”
Making the business case
In addition to simple altruism, business performance is an oft-cited reason for board diversification. One of the ways diverse boards improve business performance is they reflect the communities they serve, and that does not go unnoticed by discerning consumers, whether they are of the B2B or B2C variety.
“Companies have to reflect the communities they serve,” Euclide states, “and if your governing body does not reflect the community you serve, then I think you are very short-sighted and you’re not able to anticipate the needs of your community or anticipate where you, as a company, need to go in the future. If you don’t reflect your community, you’re going to get out of sync with what the expectations are.”
As part of the community, Lewis notes that consumers now demand diverse boards when they patronize a company. Lewis teaches business ethics and the role of business in society in the executive MBA program at the University of Wisconsin–Madison School of Business, and one subject her class is addressing is how customers look at the demographic composition of the boards of companies they patronize. They look at board demographics to determine whether boards are committed to matters such as the environment, social change, and diversity and inclusion.
“One of the easiest ways to determine whether a company is, in fact, committed to diversity and inclusion is the makeup of their executive team and their governing board,” Lewis states. “If the governing board does not include a diverse group of individuals while the company is purporting to be committed to social change, that is something that isn’t going to go very far until they are able to diversify at the top levels.”
Investors and shareholders are joining customers in insisting that boards reflect the communities they serve. Lewis notes that the Nasdaq Composite stock market index just issued new rules pertaining to board diversity and disclosure, and such standards aren’t likely to end there. “We’re also going to see that from regulatory agencies, from professional organizations and, like California, there may be other states that embrace a governmental requirement that boards are diverse,” Lewis predicts.
Since a number of TEMPO members are already serving on boards, they can share those experiences with others who have expressed an interest in board service. Lewis, whose board experience is primarily with nonprofit organizations and professional organization boards, speaks to the camaraderie of her experience. “What I get out of serving on the TEMPO Madison board is the support and sisterhood that comes with meeting with other women who are at the same level that I am in my career,” she explains. “I’m able to lean on them, seek advice with them, do business with them, and have an opportunity to recognize that the struggles, challenges, and also successes that I’m facing and benefiting from are shared.
“And so, I’ve had the wonderful opportunity to meet these amazing women,” she adds. “I’m a lawyer by trade, and so I meet a lot of lawyers. Through TEMPO Madison and my service on the board, I’ve met financial planners and academics, entrepreneurs, and marketing executives, and I’ve had the opportunity to meet these women and also work with them in other capacities.”
Euclide cites different benefits for different kinds of boards. “From the nonprofit board perspective, it really gives me an opportunity to engage in areas that I’m passionate about,” she explains. “The natural resources are one of the areas that I’ve done a lot of nonprofit work in. Environmental issues are things that I’ve been involved in, and I enjoy working with that group of people and I enjoy being able to help those organizations.”
On the business board side, Euclide’s role as board chair of WPS Health Solutions has helped her expand her horizons. WPS is a large medical insurance provider with more than 3,000 employees, but it’s also a federal contractor for Medicare, Medicaid, and veterans’ benefits. “It’s given me an opportunity to engage in some areas that I really didn’t have all that subject matter expertise in, which is an interesting thing. A lot of people think you need to be a subject matter expert in the area that you go into, and you do not. You have to have a skill set that works with knowing how a board should function, but you don’t have to be an expert on a subject.
“But I’ve learned a lot,” she adds. “It has allowed me to expand my knowledge base, and I worked with just a number of interesting, committed people, both at the staff level and on our board, and it’s a diverse group of people. We have an admiral on our board. We have doctors on the board. We have former CEOs on that board, so I have really appreciated expanding not only my knowledge base but also the ability to work with a diverse group of people and feeling like I have made a difference because the board does help set the tone for the company and ensure that corporate culture is what you want it to be.”
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