By Courtney Connley
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Now more than ever, companies are under fire for the way they build their boards, with diversity mandates being enacted everywhere from Goldman Sachs to the state of California. But are these mandates enough when it comes to creating real change? Or is it time to shift the way we think about board appointments from the ground up?
In the latest episode of "The New Rules of Business," Chief Co-Founders Carolyn Childers and Lindsay Kaplan talk to Dambisa Moyo, economist and author of "How Boards Work," about the state of boardroom diversity today and why she thinks just as much attention needs to be paid to all levels of leadership.
"I worry a lot that we are seduced by certain efforts that maybe are not yielding enough in terms of outcome," Moyo says. "You have a few more Latinos and Black people on the board, or women. Yea okay, but what about what's happening in the executive room? Your C-Suite, how is that being diversified? Are we really being as competitive as we can be without diverse representation in those rooms?"
Later in the episode, Carolyn and Lindsay are joined by Asahi Pompey, Global Head of Corporate Engagement and President of the Goldman Sachs Foundation. In addition to talking about her work with Goldman Sach's One Million Black Women initiative, which has pledged 10 billion dollars in direct capital to positively affect the lives of at least one million Black women, Pompey also offers insight on Goldman Sachs groundbreaking diversity mandate. In January 2020, Goldman announced that it would not take a company public unless it had at least one diverse board member. In July 2021, the company bumped that number up to two.
"Companies that are in the top quartile for ethnic diversity are 33% more profitable," Pompey says. "Diverse fund managers, the returns on their companies are 20% more. So aside from a DEI perspective, it's an important thing to do. The proof is in the data in terms of how these companies perform."
Listen to the latest episode of "The New Rules of Business" to learn more about diversity mandates and whether they are effective in creating real change.