Corporate Social Responsibility (CSR) is a consumer-driven trend affecting corporate board and C-Suite decision-making in corporations. It’s no longer enough to have several CSR initiatives and report to shareholders in the annual report once a year.
CEOs are holding themselves and their organizations to higher standards. Board directors are under increasing pressure from shareholders and the general public to demand more accountability. Consumers are paying attention to how companies “walk the walk.” There’s nowhere to hide.
Recent public blowups about the lack of diversity in corporate America have shined a harsh light on some big tech companies and financial services institutions. Having only one “type” of employee is not only bad for business, but bad for the bottom line. Both the tech and financial services industry have taken it on the chin by exposing their companies to public humiliation, lawsuits and dirty laundry flapping in the wind. Socially responsible recruiting practices can help.
Socially responsible search takes the concept of corporate social responsibility a step further. It places responsibility for a more diverse, resilient workforce squarely on the CEO, C-Suite and corporate board directors to source and hire more individuals outside of their normal non-diverse hiring patterns.
For example, in a financial institution that’s populated with mostly middle-aged white males, socially responsible recruiting means hiring more women, more young people and more people of color. In a female-dominated profession such as nursing, it might be searching for a man, a person of color or someone who’s underrepresented in the current employee population. There is a formula that’s right for each individual company.
Socially responsible recruiting applies to board candidates, too. It’s a well-known phenomenon that corporate board members tend to recruit people that they know, and the people they know tend to look like them. White males tend to recruit white males. This has caused stagnation in the promotion of diverse CEOs and female managers in nearly every industry sector.
The percentage of people of color on the corporate boards of the Fortune 500 has crept up from 21.4% to 22% in 2016. The 21.4% included African-American, Latino or Asian American individuals, according to a new study from executive search firm Hedrick & Struggles’ new Board Monitor report.
Women are not faring much better, actually taking a step back – down from 29.8% in 2015 to 27.8% in 2016. Because of this, Board Monitor had to add six years to its estimate of when Fortune 500 companies will achieve gender parity among their board of director appointees.
A socially responsible search means finding balance. It means acknowledging that more diverse and inclusive companies are more profitable, can spot trends faster and are more likely to attract diverse talent for years to come.
Socially responsible companies invest in socially responsible upper management to lead into the future. These companies welcome diversity on their board of directors along with the extra perspective, ideas and scrutiny that comes from having new voices around the table. A socially responsible leadership search program – combined with a socially responsible board development strategy – will transform your organization and ready it for the future.