Commentary: Board diversity a must for America

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Baltimore, MD – In his award-winning book, “The Audacity of Hope,” Barack Obama wrote, “(i)f we aren’t willing to pay a price for our values, if we aren’t willing to make some sacrifices in order to realize them, then we should ask ourselves whether we truly believe in them at all.”

As we move forward in the “age of Obama,” the time is ripe for a discussion of the importance of expanding opportunities for minorities and women and developing strategies to realize those values that make America great.

If we accept the suggestion made by Calvin Coolidge that “the business of America is business,” then we must realize that the talents, desires, traditions and sensitivities of all Americans must be reflected fully in its businesses.

Our progress as a country is directly related to the degree to which our business community thrives, and an important element of that progress is the inclusion of minorities and women on the boards that govern corporate direction and behavior.

Among Standard and Poor’s 500 companies, 78 percent have at least one black director, and almost 89 percent include women.  The search firm Korn/Ferry International determined that 78 percent of Fortune 1000 companies have a minority director.

Minority and women board members play important roles in the corporate structure because they not only raise fundamental questions about marketing practices, hiring practices and the impact of purchasing decisions, but they also bring unique perspectives based on their professional histories, training and expertise.

In 2008, three well-established leadership organizations — Catalyst, The Executive Leadership Council and

The Hispanic Association on Corporate Responsibility — formed an Alliance for Board Diversity to study the status of women and minorities on corporate boards in an age of increased media attention, shareholder activism and changing regulatory requirements.

These groups determined women and minorities remain underrepresented on corporate boards.

A fairly recent empirical study on the subject found a significantly positive relationship between the number of women and/or minorities on corporate boards and firm value. If we wish to truly realize the potential of our corporate community, it is imperative we make sure decision-makers fully reflect the breadth and depth of our society.

Craig A. Thompson is a partner at Venable LLP and chair of the firm’s diversity committee.