Diversity of privilege, the next frontier

Diversity on boards has been the subject of much debate and, thankfully, action in recent years.

Diversity is important. Diverse groups of people make better decisions. They have fewer blind spots and are less prone to groupthink.

The focus has been strongly on gender and, to a lesser extent, ethnicity. Other forms of diversity have entered the conversation, such as gender identity and sexuality. Yet one dimension remains largely unaddressed and is seldom talked about: privilege.

What do we mean by privilege?

Privilege is hard to define, especially for those who have it.

In countries like the UK, they have a term for it – the class system. New Zealand prides itself on being ‘classless’; however, we would like to challenge that myth. There absolutely is a ‘class’ system here – and not having a language for it in New Zealand is a barrier to creating solutions to improve social mobility and, we would contend, business and organisational performance. It is a barrier to the development of a more equal society.

People often talk about two degrees of separation between Kiwis. This is extended to the idea that we are all just one person away from our Prime Minister. This is true if you have privilege. But certainly not for a good majority of our population.

Privilege is when you can make a phone call and arrange a summer job for your teenager at somewhere like a CA firm rather than the local supermarket. It is when you can leverage your personal networks to help family and friends. It is when your kids don’t need to work through the school holidays. It is when you walk into a lawyer’s office and it feels safe and familiar.

In a similar way to how most of us are blind to our own culture, we are also blind to the amount of privilege we have – especially in an economy that works so much on networks, personal connections and trust. Of course, our informal ways of working are often celebrated – New Zealand is after all an easy place to navigate around … if you have privilege.

Why is this important?

The gains of economic growth in recent times have mostly benefitted the ‘privileged’. Those in executive roles have seen their salaries grow way ahead of workers or unemployed (currently CEO pay rises five times faster than that of frontline staff). Those with property or shares have also benefitted from unprecedented growth in asset values.

Therefore, many at the helms of our major institutions are increasingly disconnected from their employee base and customers. They no longer holiday at the same places. Consider Hawaii vs a Top 10 campsite. Increasingly, even having a holiday is a sign of privilege.

The kind of New Zealand where we are ‘all equal’ is not a reality despite being talked about by many. We are not arguing that if you have privilege you are bad or should feel guilty.

So what are the likely barriers to boards becoming less privileged?

In many ways the same obstacles exist for increasing gender diversity on boards. No one wants to be the first ‘token’ female or be a sole female director on a board. Similarly, it will be a lonely role to be the first ‘person without privilege’ on the board of a bank, say!

In the case of those without privilege, many would not wish to be labelled as such, and this may act as a deterrent.

Many talented people are hidden from view and will take more effort to find. Of course, it used to be said that you couldn’t find good female directors – hopefully that myth has been well and truly busted.

The way in which boards appoint directors also needs to be examined. The least well-rewarded work of a search firm is the work it does appointing board members. Many organisations will spend more appointing a frontline manager than in appointing a new director to its board. Therefore, there is an incentive to continue mining the same pool of talent, a familiar and well-trodden path.

Boards are often risk averse and appointing people who are ‘unknown’, as by definition many without privilege will be, would be difficult.

What might be some of the benefits to giving real focus to privilege when appointing board directors to our major organisations and institutions?

When society is wrestling with the very real challenge of the widening gap between rich and poor, having a board that better represents the employee base will likely lead to a better balancing of the wealth shared to executives and frontline staff.

Organisations will get a greater challenge to innovate in ways that benefit society. Most directors of supermarkets will consume very little of their products and won’t know many people who do – especially those products that create ‘harm’ in our poorer communities (think cheap alcohol, cigarettes, seductively advertised highly-processed foods, and so on). Having a board member who has witnessed first-hand the scourge of problem drinking, obesity, diabetes and food poverty may lead to much-needed innovation and wider societal benefits.

Board members of organisations that employ large numbers of minimum wage workers commonly don’t know anybody who tries to make ends meet on a low wage. Think of the benefit of a director who has immediate family or friends in a low wage job – and the opportunity to contribute more meaningfully to board conversations around flexible working arrangements and remuneration strategy across the business.

Similarly, in the public sector, boards/advisory boards would benefit hugely from ‘privilege diversity’ as they wrestle with the very real challenges of investing public money into transport, education, health, social services and other areas.

As boards embrace privilege diversity, role models will emerge. Underrepresented communities will be able to look at these new directors as examples of what is possible and challenge the belief that board positions are for the privileged who went to the ‘right schools’, live in the ‘right suburbs’ and are ‘well connected’.

Of course, we are not advocating a tokenistic approach to diversity. With the push for gender diversity, boards have become stronger. Talented women have been found, and the sky hasn’t fallen in. Far from it, gender diversity is improving boards.

Privilege diversity is a new frontier. Perhaps an even more challenging one. The benefits to businesses and society could be extraordinary.