Contributor, Korn Ferry Institute
This Week in Leadership (Nov 22 - Nov 28)
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Months may have passed since the first protests, but seasoned board director Mary Winston says leaders still have a good path for concrete action to stop racial injustice.
In the 15 years since Mary Winston joined her first corporate board, she has witnessed several cycles of mass protests over racial injustice. Each time, many CEOs and organizations expressed support and pledged to make changes to increase diversity and inclusion, and then forgot about those commitments as soon as the unrest calmed. Or as Winston, who has held the CEO role at Bed Bath & Beyond and currently sits on five public company boards, says, “I’d see everyone in the boardroom nod and say how increasing diversity made perfect sense and then nothing happened.”
The data reflects corporate America’s stubborn status quo. Currently, among Fortune 500 companies, there are only four Black CEOs. Of S&P 500 companies, 37 percent do not have a Black person on the board of directors. In fact, in total, Black leaders hold just 6 percent of director seats at S&P 500 companies. Still, months after the racial protests sparked by the death of George Floyd in police custody, Winston believes firms have been given a path—created by awareness—toward living up to pledges and promises leaders made at the height of the headlines. Or as she puts it, firms are “more mobilized than ever before” because they are “more aware than ever before.”
But how do you go beyond talk and pledges? Already it is obvious that the process won’t be quick. But at least Winston is in a position to be heard, as one of the few Black executives who sits on five boards. (In addition to being a director at Bed Bath & Beyond, she also sits on the boards of the fast-casual restaurant chain Chipotle and the manufacturing companies Domtar Corp., Dover Corp., and Acuity Brands.) “I’m waiting to see if actions are going to match words,” she says. Here is what she told us.
What has the conversation around diversity been like on the boards you sit on over the last few months?
I haven’t had a lot of meetings with the entire boards yet, but I’ve had a lot of individual conversations. Fellow directors have been reaching out to talk through ways to approach the issue, which is nice to see. The discussions are different for each company, of course. I can say that all five companies already had a strategy around diversity with proactive management, and the CEOs have been raising the topic with the board, so we haven’t had to push the dialogue from the boardroom. That said, it’s clear that the approaches need to be refreshed, metrics clarified or added, and progress monitored.
Lots of companies say they have a strategy around diversity. Implementing it is something else entirely, though, right?
That’s where the board comes in; our job as directors is to hold management accountable for the commitments they make.
And how do you do that as it relates to diversity?
It’s different for each company. For one, it could be putting metrics around hiring and promoting Black talent. For another, it could be making sure money is earmarked to support the Black community through philanthropy in the areas that will be most impactful, such as education and healthcare. For another company, it could be a focus on procurement and making sure they utilize Black-owned vendors and businesses throughout the supply chain. This shouldn’t be an either/or choice; I hope to see most companies making progress in all of these areas. Metrics can be put in place to track progress in all of these areas so boards have a way to track management’s commitment to diversity.
As a Black female director, do you feel it is your responsibility to personally be the one to speak up for the Black community and hold management accountable?
I’ve always felt a responsibility to be a supportive voice for the Black community, but I have mixed feelings about how effective that is when you’re the only Black person in the boardroom. Anytime you’re the “only” one, it takes courage to raise issues. It also heightens the likelihood that you won’t be successful because you are the one expected to raise that particular issue, so it carries less weight. Still, I know I have to raise the issues and ask the tough questions or the topic may not be addressed.
That’s interesting. So how do you address these issues in a way that resonates?
You need allies, and not necessarily Black or female allies, who can stand with you and support you. The biggest change I’ve seen over the last few months is that now my white counterparts on the board are more willing to speak out and push management to take action. This feels like a very different time, and I’m hopeful that tangible progress will be made.
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Not to take anything away from your talent and experience, but what does the fact that you sit on five boards say about diversity at the board level?
I don’t believe I serve on any of my boards because of my race or gender. I think experience is the most critical factor, and CEO and/or CFO experience is the most sought-after skill set when board positions become available. It’s also important to have a strong professional network and to be known within your area of expertise.
Beyond the functional expertise, when a board is looking to add a “diverse” director, I often get a call. But there are a lot of talented Black people who don’t get calls. That, to me, suggests that improving diversity on boards requires a focus on improving diverse representation in the corporate C-suite, where the operational and financial experience to be effective in the boardroom is gained. It’s also important to raise the visibility of those executives so people know they’re there and qualified. Boards and search firms aren’t doing deep enough diligence to identify Black talent ready to be on corporate boards. The small pool of experienced Black directors gets lots of calls, or the board is told there are no qualified candidates out there. Unfortunately, boards often accept that answer and move ahead with picking another white man to fill their board seat.
Is part of the problem that diversity is so broad a term that it makes solving the issues seem overwhelming?
I agree wholeheartedly with that—everything tends to get tossed into the diversity bucket. Not just race and gender, but also skill sets and expertise. The way diversity has been defined in recent years has benefited white women in the boardroom and C-suite more than Blacks, for instance. But looking at this moment in time and the civil unrest specific to the Black community means you have to get granular about how we’re defining “diversity.” Tracking progress around specific groups as opposed to just diversity broadly can help reveal who’s making progress or who’s not.
How did you first become a director?
I was a sitting CFO at Scholastic when I joined my first board in 2005. At the time, Sarbanes-Oxley had come into effect [the regulation protecting investors from fraudulent financial reporting by corporations], and public companies were looking for financial experts for the board’s audit committees—so my phone started ringing off the hook. Once you join that first board, then you are on people’s minds for other directorships. I worked in full-time CFO roles at the same time as being a board director for about a decade.
Did that help or hurt?
I think it made me stronger in both roles. As a director, learning how to think more strategically about the business, knowing what information to communicate, and what matters in the boardroom made me a better CFO. As a CFO, understanding the pressure management is under to execute made me more aware of what questions to ask and what to spend time on and what not to.
We haven’t even spoken about COVID-19 yet.
It is still very much front and center for every board. Businesses are reopening in phases across the country, so my boards are dealing with it every day in real time.
You are on the boards of a retailer, a restaurant chain, a paper-and-pulp company, an industrial manufacturer, and a lighting and energy management technology company. I imagine the impact and response among each of them has been very different.
Yes, the COVID pandemic is impacting different businesses in very different ways, so the areas of focus and the solutions are different as well. In retail, many stores are temporarily closed, revenue is lower, and sales are happening online, so the attention there is on business stability, retaining customers, and safety as stores reopen. On the manufacturing side, sales weren’t as impacted for my companies, but there are supply chain and plant safety issues to work through. Some of my boards are global companies, so that adds to the complexity of the situation and the solutions. What’s common across all businesses is that the virus has been very disruptive, but fortunately the management teams have been responsive, agile, and very thoughtful about issues from health and safety to liquidity and compensation to emergency succession planning.