People pushing for greater diversity on boards say companies need to expand their searches beyond current and former senior business executives, and emphasize skills over title.
“If you look around, everyone wants a sitting or recently retired C.E.O. who’s done very similar things to what their company’s trying to do sometime in the last decade,” said Jennifer Tejada, chief executive of PagerDuty, a software company, and a member of the boards of Estée Lauder and UiPath, a software company. “That’s a very narrow lens to look through.”
Under her leadership, PagerDuty’s eight-member board has just two white directors. She emphasized that she hadn’t had to settle for lesser candidates to have a diverse board. Her directors, she noted, include the dean of engineering at the University of Michigan, Alec D. Gallimore, who is Black; Bonita Stewart, who is a board partner at Gradient Ventures, an investment arm of Google, and the first Black woman to be a vice president at Google; and Rathi Murthy, who is Indian and a top technology executive at Expedia Group.
To ensure there are enough board candidates from a variety of backgrounds, companies need to do a better job promoting more people from underrepresented groups into senior roles, some executives said. That is especially true of increasing the number of Hispanic board members, said Elena Gomez, the chief financial officer of Toast, a software company, who is on PagerDuty’s board.
“What we need to do is get more Latinx people into those management roles, and that starts deeper in how you recruit and train,” Ms. Gomez said.
But the push to make boards more diverse has led to a backlash by some conservatives and libertarians. Some are suing to overturn the California laws, arguing that the state is illegally restricting the right of shareholders to select and vote on directors based on merit and skill.
“A coercive quota is being imposed on these companies,” said Daniel Ortner, a lawyer with the Pacific Legal Foundation. The foundation is representing the National Center for Public Policy Research, a group that says it promotes free-market policies, in a lawsuit challenging the law that requires directors from underrepresented groups.
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