When the Board Isn’t on Board

It is a widely held axiom that CEOs are accountable to boards of directors. The problem is that in many organizations, the CEO, especially when he or she is also chairman, wields so much power that board members may begin to lose sight of the fact that the organization is in danger of failing and the CEO needs to be fired.

In dysfunctional boards, directors often become beholden not to shareholders but to the CEO. This is especially true of directors who work inside the company. External directors and activist shareholders can be the accountability voice that is missing in an organization.

In the business of diversity, when the board supports elimination of diversity and inclusion efforts as a cost reduction measure because the CEO says so, the die has been cast. These actions explicitly say diversity means nothing to the business and the business can continue without it.

Even worse is when the board eliminates diversity without conducting a thorough analysis of brand impact, brand equity, employee promise and developing market possibilities. If board members ask these questions, however, diversity executives must have the answers.

This is not to suggest that diversity should escape cuts or scrutiny when decisions concerning the profitability of an enterprise are at stake. In fact, the opposite is true. Given the reality of how many boards function, the case for diversity as a true operational and business rationale cannot simply be packaged in a pretty box that is empty of substance. Recall, a board’s ultimate accountability is to its shareholders.

If we want to ensure accountability for diversity in organizations, it is time that we shift our mindsets and actions to match the oft-repeated rhetoric that diversity is a business imperative. Thus, boards of directors must hold the CEO accountable in a public — for this read annual report — and transparent way for diversity efforts. Otherwise, we are complicit in the mindset that diversity means business sans accountability. Thus, that is no business at all.

By accountability, I mean the organization provides detailed information on diversity efforts and how they have contributed to the bottom line. The bottom line, of course, will be defined by the organization.

We have convinced ourselves and others that diversity is important to the business, that diversity drives business. So, what are the market force solutions that we can provide to assist our boards of directors in building this accountability model? This begs the larger question of, as diversity leaders, can we answer this question ourselves? It will also cause us to reflect on whether we truly believe and can prove that diversity impacts business.

Many of us are excellent at the PowerPoints that conclude this. However, do we have the evidence to support it? Do we believe it? Are we still in the compliance mindset but simply using business language to pretend we are not?

I often hear CDOs and CEOs discuss the issue of accountability for diversity. Unfortunately, much of the so-called accountability metrics that are being used, such as the number of hires of people of color or the awards organizations can buy for being the best place for these groups, are simply ineffective. Moreover, they are not business-related.

Imagine CFOs being told that they will be held accountable for the number of awards they receive from outside entities for the neatest spreadsheet. Imagine line-of-business leaders being told their customers must vote them most likely to attain a profit in a tough market regardless of whether they actually achieve a profit or not.

Accountability and transparency are now finding a home in diversity work. As diversity professionals we are not paying enough attention to unpacking those terms in ways that we understand and that our organizations can practice.

We have rushed to accept the business case mantra. But, do we believe it? Do we live it? Can we make it a reality?

Christopher J. Metzler is senior associate dean at Georgetown University SCS. He is the author of “The Construction and Rearticulation of Race in a Post-Racial America.” He can be reached at editor@diversity-executive.com.