Online Extra: Seeking Diversity in the Boardroom
By Roger Crockett
The idea was hatched over dinner and wine beneath the soaring 30-foot ceilings at Eleven Madison Park, an upscale restaurant overlooking Madison Square Park on Manhattan's east side.
About a year ago, five of the most powerful black executives in Corporate America—John Rogers, CEO of Ariel Capital Management; Mellody Hobson, Ariel's president; Charles Tribbett, partner at executive recruiting firm Russell Reynolds; Time Warner (TWX ) chief Dick Parsons; and Ann Fudge, the retiring CEO of Young & Rubicam Brands—broke bread and brainstormed about how to open Corporate America's boardrooms to more African Americans.
Since 2002, Rogers and Tribbett have organized the annual Black Corporate Directors Conference at the downtown campus of the University of Chicago's Graduate School of Business. But this year, they followed Parsons' advice. It was time to get away from lecture halls and go upscale with the venue—and the message.
Some Serious Business
Despite considerable progress, black representation at the top of Corporate America still falls woefully short. While African Americans make up 13% of the U.S. population, they hold just 8% (about 260 of roughly 3,200) of the board seats at the nation's top publicly traded companies, according to the Executive Leadership Council, a nonprofit organization of black executives devoted to broadening black leadership. And only 2% of those seats are held by black women.
So in late September, Ariel and Russell Reynolds underwrote the newly conceived event, the 2006 Black Corporate Directors Conference. They lured nearly 150 of Black America's corporate elite to the posh Montage Resort & Spa in Laguna Beach, Calif.
The guest list included several of Black America's heaviest hitters: Ronald Williams, CEO of Aetna (AET ); Lynn Swann, Hall of Fame footballer and Pennsylvania gubernatorial hopeful; Dr. Louis Sullivan, president emeritus of the Morehouse School of Medicine; Taylor Branch, award-winning author and historian. "It was a very selective group," says H. Carl McCall, principal of Convent Capital and former New York state comptroller. "It wasn't just a lark. You were there to do some serious business."
Leveling the Playing Field
Many arrived in private jets and limousines—the way they do at investment banker Herb Allen's swanky annual retreat for media and technology moguls in Sun Valley, Idaho. They stayed in beachfront hotel rooms and golfed at a prestigious Laguna links club. There, on the rocky shores of the Pacific Ocean, black executives finally did what their white counterparts have done in places like Sun Valley for nearly a quarter-century.
"The playing field is leveling," says Parsons, one of the few blacks invited to Allen's annual soiree. "The process by which boards are selected—which used to be the old boy network—is opening up."
The Laguna event, organizers hope, will become instrumental to that process. Conference president, Roxanne Ward of Ariel, says she and her fellow organizers have received scores of e-mails from attendees.
Many remain eager to know about plans for next year's event. "This conference was 10 notches above the others, and the others were great," says Robert Davidson, CEO of Surface Protection Industries and a member of three corporate boards. "It exceeded our expectations," adds Ariel's Hobson. "The energy and spirit around topics was more palpable than in past years."
A talk by Branch rocked the crowd. The author, who has written prolifically about the civil rights era and Dr. Martin Luther King, spoke candidly about how the struggle to illuminate corporate boardrooms with diversity's light is an extension of King's fight for racial freedom.
"It was a way of talking about the moral obligation that directors have without preaching it," says Anthony Wagner, a vice-president at Kaiser Permanente and a board member of Longs Drug Stores (LDG ).
Panorama of Involvement
Branch's lessons were underscored by a handful of CEOs who shared their insights with the group. Aetna's Williams emphasized that in order for diversity initiatives to work, the CEO must demonstrate commitment. To that end, he has not delegated chairmanship of the company's diversity council but assumed the role himself.
Disney's (DIS ) Robert Iger also spoke openly about minority involvement on his company's 13-person board, which has two women, one who is Hispanic, an African American, and an Asian American.
The conference drove home the point that African American involvement spans the panorama of professional life. Legendary producer and songwriter Quincy Jones held court at an al fresco dinner party. The moments that mattered most Jones said, were not producing Michael Jackson's Thriller album, but the effort he made to challenge the music system and open the door for black performers. "That was very useful in seeing how Quincy Jones had taken risks," Wagner said.
On Multiple Boards
The hope is that such inspiration will lead to more progress. While just a fraction of board seats are occupied by blacks today, about 90% or more of the largest companies in the consumer goods, finance, health-care, and transportation industries have at least one black director.
Recruiters like Tribbett note that corporate boards have often expressed concern that they simply don't know where to find qualified African American board candidates. That's why a select group, including Parsons and Ariel's Rogers, sit on multiple boards.
An Excellent Resource
So the networking and relationship-building at the conference might be more important than any other aspect. "When you leave this conference you have a list of great corporate directors," says Gary Cooper, chairman of Commonwealth National Bank and a member of the boards of PNC Bank (PNC ) and U.S. Steel (X ). "As we recruit new members at U.S. Steel, for example, we know where to go and look for them."
From here on out, it looks as if those in search of promising black board members will be heading to the California coast.
Crockett is deputy bureau manager in Chicago