Risk Management, Diversity and 50 Cent – Connecting the Dots!

I just got back from an amazing day on the Stanford campus at the Arthur and Toni Rembe Rock Center for Corporate Governance.  The day was a joint collaboration with Stanford and the CalPERS/CalSTRS leadership.  The day was a fantastic opportunity to hear about the call to action for diversity in the corporate boardroom.  The day was entitled:

Diversity on Corporate Boards: When Difference Makes a Difference.

The difference that was highlighted was the difference that happen when you open the conversation and decision making to people with diverse backgrounds.  This can be gender, race, disability, age, sexual orientation, religion and more.  The more viewpoints you consider the better the outcome.

This may seem like a controversial viewpoint considering the glacial pace of women and minority representation in the boardroom.  Catalyst which has been publishing data on woman’s advancement in business reports in 2008, women held 15.2 percent of directorships at Fortune 500 companies; this number was 14.8 percent in 2007. The number of companies with no women board directors increased from 59 in 2007 to 66 in 2008.

So what does it have to do with risk management and 50 Cent.  As a business you can optimize risk for your reputation and employee engagement when you allow your leadership to consider the impact of who gets to be heard.  A system that excludes voices other than the prevailing majority is taking a risk of customer, activist investors and employees losing trust in decision making at the top.

Back to 50 Cent.  This is an example of listening to the wisdom of a diverse voice.  You may or may not be a fan of his music but any investor and business leader has to appreciate his financial maturity and leadership.  If you are not open to listening to voices coming from people who have differences from you the 21st century is going to be a challenge.  The challenge in the financial world is going to be institutional investors like Calpers/CalStrs.  So you want some big investors to believe in you than this week has convinced me that you had better open up your world.  The time is now to start thinking about the good governance that happens when you look for diversity in your employees and corporate board appointments.

The 50 Cent video was first posted by Bruce Carton who is a former senior counsel in the SEC’s Division of Enforcement and is now the editor of Securities Docket.  He now hosts a Compliance Week blog called “Enforcement Action.”

One Response to “Risk Management, Diversity and 50 Cent – Connecting the Dots!”

1. Nicole Voigt says:

   September 22, 2009 at 1:00 pm

   Hi Fay,

   I realize this reply is a little late, but we’ve been busy playing “catchup” since our product launch on September 11th.

   You did a great job on “connecting the dots”. Although many companies may already consider their reputation when hiring employees they do not necessarily consider their actions as risk management. I appreciate the light you have shone on diversity management, and you used a great example (50 cent).

   Regards,
   Nicole

   Reply