Boards have another problem besides a flagging commitment to gender diversity (See Spencer Stuart UK report on diversity). It is their lack of cognitive diversity that continues to hobble corporate governance and lead directors into unexpected minefields. For instance, why did it take 20 female accusers coming forward before one man, Crispin Odey, admitted wrongdoing? And why did the board of his now defunct hedge fund seem so feckless in its ability to act earlier?
The fact is that most directors of top boardrooms are cut from the same cognitive cloth. Being past and current CEOs themselves, there is an occupational tendency for directors to be overly deferential to star CEOs. This often renders them incapable of entertaining different scenarios, especially if they are unpleasant. One might think the arrival of ESG would broaden directors’ horizons, but what it seems to have done is to create a check-the-box mentality to issues, like advancing gender diversity and curbing sexualized wrongdoing, without any actual thinking going on.
If boards are beginning to pull back from their diversity commitments, as the Spencer Stuart UK report suggests, it is not surprising. Their vision is nearly always limited, shaped by yesterday’s values and concerns, not tomorrows, with an almost universal inability to see themselves and their companies as others see them.
There is a reason why, decades after Peter Drucker made his classic observation on the failure of boards to do their jobs, directors are still often the last to know what is going on and what needs to be done to prevent disaster. It is part of the bigger problem of a lack of different types of directors with a more varied skill set of earned life and business experiences. Put another way, if directors were drawn mainly from the narrow world of concert violinists, nobody should be surprised there is not a lot of rock and roll coming from the boardroom.