Opinion

For SMEs, board diversity is nothing more than a diversion

4 min read

09 February 2016

These days, while diversity on boards is to be applauded, it’s a concept that needs to be approached with caution if you’re an SME – it could result in your team resembling a glove with six fingers.

Not because there’s something inherently dubious about it, there absolutely isn’t. It’s a laudable aim which, for large companies with a correspondingly large board membership, the more diverse their personnel, the richer the advice.

It comes, after all, from a wider range of life experiences and viewpoints. Major companies embracing diversity rather than simply paying lip service to it (diversity training for instance, has been notoriously unproductive – all it does is tick a box) have seen impressive results.

But for an SME, the problem lies in its title; it will find it difficult to play the diversity card because of the relatively small numbers on its boards.

In fact, if they were coerced into addressing diversity by some legislative fist, they might well find that, far from profiting from the introduction of a diverse board member, their fortunes could be hampered by someone who fits the diversity role but lacks the skills required to make meaningful and profitable contributions. Rather like having a glove with six fingers.

Put simply, SMEs cannot afford such positive discrimination. They have straightforward demands to meet every time they convene as a board: to look at opportunities, to anticipate challenges and to be aware of potential risks.

Read more on diversity:

Their limited size means that whoever sits around that table needs to make a significant contribution, irrespective of gender, race or sexuality. If someone from such a background can enhance the decision-making of the board, then hooray for Henry or Henrietta.

The setting of mandatory quotas for gender, for instance, wouldn’t work for SMEs, even though the European appetite for such a controversial initiative is building speed.

In Germany, for example, large companies have to include 30 per cent of women as non-executive board members. Similar approaches now exist in Italy, Spain, France and Norway, although to date, SMEs are exempt from such quotas.

It seems then that for SMEs, what’s happening to larger companies is to be admired, perhaps even envied, for such initiatives can bring huge rewards. But that really should be as far as it goes – admiration and not emulation. 

For SMEs, diversity is nothing more than a diversion. And diversions always take you longer, cost more money, and bring more than a hint of frustration. Ask any driver – male or female.

At the First Women Summit 2016, controversial comedy superstar Katherine Ryan explained her journey from Hooters Girl to how she got to where she is today – especially as comedy is undoubtedly one of Britain’s less gender equal industries.

Concerned with issues surrounding gender diversity in business? Don’t miss the Real Business First Women programme:

Drawing on years of the First Women movement and the phenomenal network of pioneering women the Awards has created, this programme features The First Women Awards and The First Women Summit  designed to educate, mentor and inspire women in all levels of business.

Ian Wright is the founder of non-exec network NonExecutiveDirectors.com

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