HP Joins the Fight for More Diverse Boardrooms

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One of the big problems with US corporations, and technology firms specifically, is the lack of both focus and diversity at the board level. There has been an unfortunate saturation on many boards by hedge fund managers who are almost universally male and could care less about the related firms’ customers or employees. Customers by nature are as diverse as the market, but in technology firms, partially due to male focus on STEM (science, technology, engineering, and mathematics) education, tend to be male-dominated and, as showcased in books like Technically Wrong and Brotopia, this has led to bad products and some genuinely horrid and misogynistic employment practices.

Fixing that starts at the top, and HP’s last and current CEOs have taken aggressive stances to fix this in HP. But, this week, Enrique Lores has gone beyond that and is moving to help drive change in all companies to address this problem in the US definitively. Enrique penned a column on LinkedIn on this, and it is worth a read.

HP, when they were split out, had the chance to create a diverse board, and Dion Weisler (HP’s prior CEO) stepped up, creating one that was 58% minorities and 42% women, far more diverse than old HP was, and far more diverse than most of their peers are.

HP just had Kim Rivera, the President of Strategy & Business Management and Chief Legal Officer, appear before the California Senate in support of the new law requiring California Company Boards to be diverse. This benefit to companies is supported by science, as McKinsey’s research has shown that companies with more diversity at the executive level are also more profitable.

Why You Need A Diverse Board If You Are Serious About Diversity and Success

Boards tend to become like clubs in that experienced CEOs often pack them with friends and tend to fill them with other CEOs who also put them on boards. Boards should be about assuring the success of the business and stockholder interest, but instead, they tend to drift to becoming support structures for the CEO. Unfortunately, even then, they tend to be more supportive of the CEO’s compensation than supportive of the CEO’s business success. Many are just rubber stamps with no real authority, which can lead to an abuse of power and either the failure of the company or the catastrophic end for the CEO’s career when their abuse attracts the unfortunate interest of regulatory agencies like the SEC or sexual harassment lawsuits.

The brilliant CEO knows that they want both qualified members of their board that can point out problems before they occur rather than either trying to benefit from them or keeping quiet because they don’t want to upset the then sitting CEO. A board that is there to support decisions the CEO has already made is worthless, yet that is precisely what too many boards are.

Besides, the customer base of most companies is diverse and likely becoming more so, so you need a board that reflects that diversity. Otherwise, issues that might normally be identified by the board are missed due to the lack of diversity.

Diverse Boards Help Assure Diversity

One of the significant historical problems in trying to create a diverse company is the glass ceiling that results from the common practice of starting the effort at the bottom rather than the top. The issue is that the predominantly male executives, and the few women executives who are often put in jobs to create a false sense of diversity, view talented women moving up in the organization as threats rather than as existing and potential future assets.

Women employees are shuffled off into areas like communications that aren’t diverse, creating departments that are critical to the company but don’t interoperate well with their line peers. The company may look diverse, but it still lacks the organizational diversity that leads to the necessary collaboration needed to ensure corporate success.

I was talking with another large technology company’s comms executive earlier this week, and she was lamenting that the engineering organization wouldn’t listen to her because she was a woman and not an engineer even though she had decades of experience in communications the engineers lacked. This inability to collaborate had resulted in a sub-optimal launch that was too focused on things engineers cared about but with little content that would convince a customer to buy the products. As a result, I expect, initial demand for the new offerings will be sub-optimal. The company had the talent, but a lack of organizational diversity significantly reduced the effectiveness of that talent resulting in critical mistakes.

This problem is why it is essential to have a diverse Board, so they can drive a diverse executive staff, that in turn, can drive diversity at a department level throughout the company. I believe this lack of board and executive diversity is why, decades after the <href=”#:~:text=A%20Brief%20History%20of%20the%20Equal%20Employment%20Opportunity,on%20color%2C%20national%20origin%2C%20race%2C%20religion%2C%20and%20sex.”>Equal Opportunity Employment Act was ratified, we seem little farther with diversity than we were in the ‘70s when it was penned.

Wrapping Up: Choices…

Everyone has choices to make throughout their lives. As executives, it is easy to focus on personal compensation and protecting the status quo, but that rarely ends well, mainly when dealing with the massive changes we are today. I’ve known Enrique Lores for several years and have always felt he was the right kind of CEO—one that genuinely cares about his people and customers. This effort further showcases that focus. Besides, HP’s executive team continues to impress with their focus on Corporate Social Responsibility which is more a part of their culture than just a PR effort, and I can only hope their aggressive position on this effort will drive real change in my industry, it needs it!

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About Author

As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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