The age, gender, and ethnic diversity of a company or organization’s board is fundamental to its financial and operational success, helping it perform better, make more effective decisions, and emerge from adversity stronger.
That essential link between board diversity and performance is something that organizations, including global health organizations, have long failed to recognize — and continue to ignore, as shown by the findings of Global Health 50/50’s new report, “Boards for All? A review of power, policy, and people on the boards of organisations active in global health,” published by Global Health 50/50.
Measuring, for the first time, the gender and geographic diversity of the boards of the world’s most influential global health organizations, the report found that the overwhelming majority of board seats are held by men from high-income countries. Across the more than 2,000 board seats of 146 organizations assessed, less than 1% — just 17 seats — are held by women from low-income countries. The analysis did not include race or ethnicity, as they are very difficult to measure using publicly available data. The private-sector companies, a subset of the organizations that Global Health 50/50 assessed, were even less diverse, with no women from low-income countries sitting on their boards.
That stands in stark contrast to the 51% of board seats held by people — mostly men — from the U.S. and the U.K.
These alarming statistics demonstrate how unevenly power is distributed in the governing bodies of some of the world’s most powerful organizations. This lack of diversity is not only unjust, but also lends itself to poor performance. Governing boards’ lack of representation of the communities they serve reveals a critical flaw in their business models at a time when it is extra important for them to make effective decisions and navigate risk successfully to guide the world through the Covid-19 pandemic.
The pandemic has had severe economic consequences around the globe, illustrating in vivid detail how interconnected are global health and economic performance. As a result of the pandemic, unemployment shot up around the world, a majority of countries fell into recession, and global trade fell in 2020 by 8.9% — the steepest drop since the financial crisis.
As the world continues to reel from these economic shocks, it is more important than ever that the organizations charged with ensuring equitable health outcomes for all people are resilient and effective. To do that, they must commit to improving the gender and geographic diversity of their boards and governing bodies.
By adopting affirmative measures to drive change at the board level, global health organizations will be better equipped to make decisions that reflect the needs and priorities of the populations they claim to serve. The same is true for private-sector companies: improved board diversity is likely to improve their revenue growth and drive value for shareholders.
A recent report by Board Ready, a U.S. nonprofit, found that companies with more than 30% of board seats held by women consistently outperformed their less-diverse peers in terms of year-on-year revenue growth. A separate report by McKinsey and Company showed that companies whose leaders represent multiple perspectives were more likely to emerge from the Covid-19 pandemic stronger.
As the co-founder and CEO of Women on Boards UK, I regularly meet smart, ambitious women who are eager to take the next step in their careers. It often takes some convincing before they believe that serving on a board could be a viable option for them. These women already possess the skills necessary to become valuable contributors to the governance of an organization. Yet they are put off by the fact that they simply don’t see many people at the highest levels of leadership who look like them or come from similar backgrounds. The continued paucity of women in executive leadership roles is inexcusable. Women on Boards believes companies need to be aiming for a 40:40:20 gender split, where 40% of the board is male, 40% female, and the remainder the result of natural fluctuation of gender recruitment. This is what we need to push towards, and we have a long way to go.
There are several strategies that organizations can adopt to dismantle structures that have traditionally held back women from low-income countries. These include advertising board roles transparently and openly, deliberately seeking candidates outside of existing networks when recruiting for these roles, and adding a new board seat so there’s no need to wait for a director to retire or reach their term limit. Some people from the so-called Global South, particularly those from disadvantaged communities, need additional support, such as funds to attend meetings and on-the-ground support networks to offer information, encouragement, and advice.
To ensure greater representation of younger people, board positions should reduce their criteria, such as 20 years of experience in global health or CEO experience. Also needed is a support structure specific to global health to enable greater participation, because the support is really valuable to individual board members as well as to the organizations themselves. These strategies must also be accompanied by advocacy and activism by global health professionals to demand these changes.
An evolution in governance is underway today. As the world and the global economy become increasingly turbulent, more and more organizations are recognizing that without diverse perspectives at the highest levels of leadership, they simply cannot keep up. With major industry regulators, such as the Financial Conduct Authority in the U.K., already recognizing this and introducing policies to ensure board diversity across the financial services sector, the global health sector is clearly lagging behind.
Instead of evolution, it’s revolution that’s needed: global health organizations publicly committing to creating “boards for all” if they are to deliver on their core mission of achieving health for all.
Fiona Hathorn is the co-founder and CEO of Women on Boards U.K.