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for a very long time boards were not
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asked to be representative of the people
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who they served the the communities in
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which they operate or their larger
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stakeholder base so kind of like the
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government when the government doesn't
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represent the people the government
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starts making all sorts of decisions
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that don't always reflect the needs of
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all the people
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welcome to a special edition of the
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ripple effect I'm Dia Loney in honor of
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Juneteenth this month senior advisor to
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the dean for the Coalition of equity and
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opportunity Kenneth Shropshire will be
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your special guest host in each episode
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this month Ken and Wharton faculty are
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focusing on the critical themes of
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diversity equity and inclusion we'll be
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covering a diverse range of topics
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bringing you the latest insights and
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knowledge that you could apply to your
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life and work so get ready to dive into
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this special edition of the ripple
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effect with guest host Ken Shropshire
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while the topic of diversity Equity
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inclusion has so many different facets
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to it one though is how Corporate boards
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are thinking about these topics as we
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move forward pleasure to be joined by
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Stephanie Curry who's an assistant
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professor of management at Thorne school
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and as well our friend Ken Shropshire of
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the Wharton School and Ken let me start
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with you because the larger scale the
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role that the board has in really kind
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of getting this process set and roll
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becomes a very important one doesn't it
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really does so the board can apply
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pressure
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can move forward regulations or or
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whatever new standards a company might
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want but we see a lot of this in a lot
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of different areas we might see it in
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cyber security or whatever else and
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boards can be silent on this or they can
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go full speed ahead and make it their
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major issue so so I'm anxious to speak
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with Stephanie about her extensive work
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in the space and to see if we can help
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leaders out there and board members out
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there on doing better well and as I said
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Stephanie has uh just a wealth of of
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knowledge in this area so I will let you
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two have your conversation a pleasure to
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be joined Stephanie having you back on
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the show thanks for your time today
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Stephanie my good friend yes
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this is so this is the uh the old and
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and the relatively new
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um
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I have become uh great friends and
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colleagues in our short time of knowing
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each other
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and Stephanie before we talk about
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boards as a primary focus I I was
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thinking about you know kind of the old
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school new school like kind of thinking
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about this and you know before me
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there's you know
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emancipation reconstruction equal
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protection
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um even before me too or the kind of the
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World War II kind of activities that
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took place
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and then you got Brown versus Board
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you've got the the Civil Rights kind of
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laws that cut happened in the in the
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early 60s then we've got the affirmative
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action kind of moment and then we have
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the
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uh retrenchment from affirmative action
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we have kind of negative period and then
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George Floyd was kind of this moment
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forward
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where are we now
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this whole Dei spaces where it's we're
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characterizing everything which could be
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a whole nother show about what we should
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characterize this whole Space is but but
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where where are we now and and then
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we'll talk about board so yeah so Ken
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we're in a we're in a really interesting
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time I think if you were to ask me this
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question in 2017 when I arrived at the
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Wharton School I would tell you that the
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students who I teach who you know you
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had taught and believe that we didn't
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have a race problem in America still and
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certainly that wasn't a problem race
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wasn't an issue that we need to discuss
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outside of the U.S borders and so that
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was six years ago and so I would say
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that there had been previously a lot of
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indifference amongst uh citizens in the
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U.S around the world is certainly
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amongst companies in taking up topics of
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race so I would say if you were to dry a
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graph based on the things that you
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talked about there's sort of an uptick
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at key key points in time key moments
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around civil rights legislation
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Etc and then I would say 70s 80s 90 keep
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I think we would start to see like a
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down swing in the numbers of activities
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that corporations were engaging around
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this topic schools Etc and and so you
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know the interesting part is uh
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the the first movement if you will was
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around 2014 and 2016. um I always talk
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about that as the first black lives
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matter movement when we actually thought
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that the black lives matter movement was
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sort of some extremist group right we
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didn't have a lot of clear unders and I
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say we uh meaning you think that on
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average citizen didn't have an
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understanding of what these issues were
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they didn't understand why people were
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talking about police brutality Etc so we
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started to see some interest in in 2014
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and 2016 in the general population
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obviously Colin Kaepernick started
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kneeling we didn't think that was a
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great thing back then
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um and then 2020 happens and then it's
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the sort of this explosion of interest
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in talking about racism systemic racism
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which was something that was I would say
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new in our vocabulary as everyday
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citizens
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um and then we saw an explosion of
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interest in this topic outside of the
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U.S and not necessarily talking about
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America can black lives they were
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talking about Japanese lives and
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Nigerian lives and people who were from
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historically marginalized ethnic groups
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in their country so you know sum it up
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where we are is
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um in a place where there's a heightened
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attention to this topic we still don't
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all agree on whether or not racism is an
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issue or how to address it but I would
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say that for people like yourself and
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myself who study these topics it's a
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good time to be studying and talking
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about it because there is significant
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interest in knowing more and learning
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what we can do now that's that's a great
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catch up and it is I mean it's it's
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horrible horrible phrasing on your part
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though it's a great time to be studying
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this I guess it's it's not great that
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we're studying it I guess so it is a
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fantastic time for people that are
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interested in trying to trying to solve
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these these issues and leaders really
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play a role in this and and this gets us
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to to boards and thinking about what
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boards do with companies why do we care
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to get to it directly why do we care
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about and I want to be specific about
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the diversity that we're talking about
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why do we care about more blacks and
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Latinos on boards as well as other
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diverse groups what what difference does
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it make in the context of what we're
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talking about what is it what can
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companies do and then what can boards do
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to make companies do that
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so I'm going to tell you what the ideal
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is and then I'm going to tell you what I
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actually study because these are two
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different things right
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so the ideal is is that boards act as
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strategic advisors to their firms but
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also as people who monitor the firm's
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activities and help the firm to make
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sure that it's complying with all that's
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expected of them from a variety of
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stakeholder groups so that's compliance
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monitoring on the one side and the other
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side it's a strategic uh position
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strategic advisory position so so on a
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good day what we want a board to be able
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to do is to help the firm understand its
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customer base the communities it
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operates in and to really understand how
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its products and services
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can help to solve the needs met and
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unmet needs of people in who who are
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part of the stakeholder Network right on
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the one hand on the other hand as as
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corporations they do have
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responsibilities to the societies that
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allow them to exist so here here in the
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U.S publicly traded companies have you
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know relationships with with the
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government right and the government
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especially in heavily regulated areas
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like or Industries like Finance expect
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for the firm to be following
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um whatever regulations it has set forth
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so this gets back to representation
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when the board is not representative of
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stakeholders doesn't understand the
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needs of stakeholder groups we have a
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problem
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and so for a very long time boards were
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not asked to be representative of the
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people who they serve the the
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communities in which they operate or
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their larger stakeholder base so kind of
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like the government when the government
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doesn't represent the people the
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government starts making all sorts of
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decisions that don't always reflect the
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needs of all the people so the ideal is
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that we have a diverse board in this
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case a racially diverse board that also
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represents the interests and
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perspectives of people from a variety of
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racial groups so that's the ideal is
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that these boards will raise issues that
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are pertinent to the livelihoods of
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various stakeholder groups and they will
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make sure that the CEO the management
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team understands in the activities that
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they engage in how how to address these
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stated groups needs but that's not what
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I study what I study is uh why and how
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why boards do not do that right why uh
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diversity or diversifying a board has
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been so problematic
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um why is it that even if you have a
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diverse board they may not necessarily
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uh engage in activities that meet your
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needs or my needs
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um and so yeah I think it's a it's a
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conversation that you know I hope to
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continue to build through my own
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research I think the conversation about
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board diversity has spent a lot of time
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focusing on getting a more diverse board
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will help us to perform better without
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fully understanding what the mechanism
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is that would explain that
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um but it is an important question but
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it also requires us to not just focus on
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uh diversity for diversity's sake but to
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understand uh that the people who are on
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the boards are still people we want them
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to make decisions that are helpful for
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us all okay so let me probe a little bit
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more than as someone who sits on a
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public board and thinks about this issue
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a little bit of financial board yes
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correct Financial work and whatever
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whatever I am
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uh trying to be anybody wants to be on a
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board the smart question is always
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well what's in the best interest of the
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shareholders I mean that becomes the
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ultimate kind of stakeholder question
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and and a lawyer said all the legal
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cases you go to Delaware courts in the
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end was that board member acting in the
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best interest
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of the shareholders and often and you
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may tell me too often that goes to share
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price Share value that that's how you
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translate what's what's in the best
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interest how does that conflict or how
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does that meld with this idea of
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issues that are important with regard to
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Dei our investors of the company yeah so
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so in the last few years a big
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institutional investors like BlackRock
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and State Street and Vanguard have made
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the topic of board diversity one of
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their greatest priorities and when you
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read their position papers they they
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speak a lot about you know the potential
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for enhanced financial performance from
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in from increased board diversity they
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cite all the academic research on this
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topic they cite consulting firms
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research on this topic but beyond that
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what they talk about is risk which you
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can appreciate as a lawyer the language
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of risk and the language of risk comes
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uh is one such that if we don't know
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um our neighbors and understand what
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their needs are if we are missing
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um targeting our products and services
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to certain communities if we are not
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following and complying with the
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regulations that are
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um you know know given to us to abide by
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as it relates to particular racial
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groups then we might have a problem that
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might hurt our financial performance and
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so while there's a lot of the
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conversation around how do we increase
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you know our Market size and and
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generate Revenue by being able to gain
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entry into diverse markets there's that
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whole conversation lately the
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conversation has been about risk
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mitigation and that's something that
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shareholders care about is losing money
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because we haven't uh effectively
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monitored all of the costs
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so even if you don't have the bottom
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line information about this will help
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you be more profitable
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as a board member be aware that there
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may be other externalities that will
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come at you and cost the company money
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which will impact the bottom line yeah
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you don't act positively in these ways
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and this and this gets captured not only
00:13:58
in this Dei kind of conversation but
00:14:00
also in the ESG conversation the the S
00:14:04
the S of the ESG conversation
00:14:08
how you mentioned some big name
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companies Enterprises that are
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aware of this and highlighting this how
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Universal is that understanding now in
00:14:19
in your work in your conversations
00:14:21
uh are you enlightening companies yeah
00:14:25
to the broader concern or is it
00:14:26
something that that seems to be in the
00:14:30
atmosphere yeah so
00:14:33
so before coming to Wharton I was a
00:14:35
professor at Cornell and one of my
00:14:38
students who ended up uh you know
00:14:41
working with me in a variety of research
00:14:42
projects uh moved on to State Street
00:14:46
um as state tree Global advisors and he
00:14:48
works in the unit that has put out all
00:14:51
this guidance to firms on uh what they
00:14:55
should be doing initially it was around
00:14:57
gender diversity several years back and
00:14:59
then more recently was around racial
00:15:01
diversity so Ryan and his team and I
00:15:04
have had a number of conversations
00:15:06
they've interviewed me in a number of
00:15:07
other uh people who you probably know
00:15:10
who are on boards
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um to talk about like what does this
00:15:14
conversation look like what's an
00:15:16
Institutional Investor's role in it and
00:15:18
because Ryan was my former student he
00:15:21
has come to Wharton and he has actually
00:15:23
come in and sat in on my diversity
00:15:25
classes and actually taught our students
00:15:28
and the interesting thing is we have
00:15:30
another student at the Wharton School in
00:15:31
a in a in our MBA program who used to
00:15:34
work in Ryan saying role at Vanguard and
00:15:37
so this past fall it was interesting to
00:15:39
hear them talk about uh their shared
00:15:42
responsibilities around meeting with
00:15:44
board chairs and helping them to
00:15:46
understand why this topic was important
00:15:48
and why they should continue to keep
00:15:50
topics around diversity racial Equity
00:15:53
gender equities at the top of their
00:15:55
conversation so I would say from the
00:15:57
perspective of big institutional
00:15:59
investors yes there's certainly a lot of
00:16:01
attention now they're not the only
00:16:03
investors but they do tend to hold I
00:16:05
mean think about as Ryan explained to me
00:16:07
think about your you know we don't have
00:16:10
a 401k we have a 4013b but you think
00:16:12
about your retirement plans and who's
00:16:14
managing that money those are the folks
00:16:17
those are the entities that are going
00:16:18
and meeting with board chairs to say hey
00:16:21
what are you doing with people's
00:16:22
retirement monies and are you paying
00:16:24
attention to ESG and Dei and racial
00:16:27
Equity
00:16:28
um how is the company doing and is the
00:16:30
board actually doing its job to hold the
00:16:33
company accountable so from our
00:16:35
perspective or from my my perspective
00:16:36
when I see the big institutional players
00:16:38
doing so much of this work I think that
00:16:41
it's um you know it's an indicator that
00:16:44
of its prominence but you know in my own
00:16:46
daily activities working with my former
00:16:49
student who's obviously a professional
00:16:50
doing you know amazing work around this
00:16:52
and then meeting people in our own MBA
00:16:54
class who have also taken up the role
00:16:57
the last thing I want to say about this
00:16:59
is
00:17:00
um you know when you were talking about
00:17:02
history and and I started thinking about
00:17:04
Generations I'm a generation xer right
00:17:07
so I'm kind of in between I would say a
00:17:11
generation of of one type of activism
00:17:14
and another type of activism and Ryan he
00:17:18
is oh he he will Define himself as a
00:17:21
white American male which I find super
00:17:23
fascinating
00:17:25
um given I think about who traditionally
00:17:27
tends to take up these issues Ryan is
00:17:30
also in his late 20s as our is the
00:17:33
average age of our MBA students and the
00:17:35
NBA student who was also taking up this
00:17:37
issue around racial Equity at Vanguard
00:17:39
was a white female and so for me as a
00:17:42
generation excerpt watching who's
00:17:45
actually doing this work and who's
00:17:46
trying to hold the boards accountable
00:17:48
it's not people who look like you and me
00:17:50
can there's absolutely people who are in
00:17:53
their late 20s and white Americans who
00:17:56
have strong
00:17:58
um sentiments around this Topic's
00:18:00
important and that's that's the question
00:18:01
I want to ask you before we start to
00:18:03
close out because I was in the New York
00:18:06
Times recently there was a discussion
00:18:09
about a new dictionary that skip Gates
00:18:12
you know in real estate test coming out
00:18:14
on the African-American language some
00:18:17
stuff and it's got all these terms that
00:18:19
I kind of chuckled to myself as I heard
00:18:21
heard some of them that are not broadly
00:18:23
known to the rest of the world but but
00:18:26
the one that may or may not be in there
00:18:28
is as you were saying this I was
00:18:30
thinking about good white folks and he
00:18:33
kind of has framing like this yeah and
00:18:36
when I think about that and this is you
00:18:38
know within the culture
00:18:40
white folks that are doing good stuff
00:18:42
that are down kind of as you're
00:18:45
describing
00:18:46
so so knowing that knowing that that can
00:18:48
happen going back to the beginning of
00:18:51
this conversation
00:18:53
how important or what kind of signaler
00:18:56
is the diversity of the board that this
00:18:58
work will actually be done and we can't
00:19:00
can't the board be people by good white
00:19:04
folks or Ryan and as we're describing
00:19:07
this
00:19:08
and how important is it just as a as a
00:19:11
proxy to have a diverse board yeah it's
00:19:15
certainly a question that I'm asked a
00:19:17
lot especially now that we have this new
00:19:19
generation that has done a lot to begin
00:19:22
to understand the lived experiences of
00:19:24
other people so that is so important and
00:19:26
I will talk about these folks as allies
00:19:28
right a whole lot of my work including
00:19:31
my work on board diversity the academic
00:19:33
side of it is looking at allyship and
00:19:36
how that happens and and how that works
00:19:38
and why that's important on board so it
00:19:40
is so important that allies like Ryan
00:19:42
and and this this student who's award an
00:19:45
NBA student exists and that they are
00:19:48
talking about these issues but that's
00:19:51
not a replacement or that's not a
00:19:53
substitute for people who actually come
00:19:56
from these communities have these
00:19:58
backgrounds have these experiences who
00:20:01
are reflective of these subsets
00:20:04
um you know there is I don't want to
00:20:06
call it a Nuance because that sounds
00:20:07
like marginalizing the experience but
00:20:09
there's a difference there's a
00:20:11
difference experience that you have when
00:20:13
you walk around
00:20:15
um in that body in a black body in an
00:20:18
African-American body in the U.S and you
00:20:20
navigate the professional Workforce and
00:20:22
heck when you navigate what it's like to
00:20:24
be a board member often one of you know
00:20:27
13 right one person who is
00:20:30
underrepresented and the other 12 for
00:20:32
example might be all white there's a lot
00:20:36
more that comes with that than can be
00:20:39
just I think subsumed by somebody who
00:20:41
just learned about it from talking to
00:20:43
other people but Ally is important but
00:20:45
people who have the lived experience the
00:20:46
shared experiences of navigating these
00:20:48
companies are important as well that
00:20:51
said I want to say that just because
00:20:53
you're black doesn't mean that you have
00:20:55
the same lived experience as another
00:20:57
black person and so in my research what
00:20:59
I try to talk about is
00:21:01
um you know understanding that
00:21:05
um when we're thinking about board
00:21:06
diversity
00:21:07
um we are trying to actually capture not
00:21:11
just the brown person or the black
00:21:13
person on the board and we're talking
00:21:14
about racial diversity we're trying to
00:21:16
capture the perspective and so let's say
00:21:19
for example
00:21:20
um I probably get in trouble when I say
00:21:21
this it is great if everyone on our
00:21:25
board got their MBA from the Wharton
00:21:26
School right lots of us would be really
00:21:28
really really happy
00:21:30
um and so sometimes what happens is
00:21:32
people say well we need another woman
00:21:35
and we need another black person let's
00:21:36
look and see who else graduated come to
00:21:39
Wharton MBA program
00:21:40
so while that's nice it actually hasn't
00:21:44
truly created uh in in many cases the
00:21:47
diversity that the board is seeking
00:21:48
because that network is small they are
00:21:51
they've probably been taught very
00:21:53
similar ways of thinking about
00:21:55
businesses
00:21:57
um and so I think one of the next stages
00:21:59
for companies today is when they're
00:22:01
thinking about recruiting a diverse
00:22:03
board to step outside their alma mater
00:22:06
Network right to step outside their
00:22:10
client network and to really try to find
00:22:13
people for the board who are not only on
00:22:16
the surface difference because they have
00:22:19
different color skin or they have a
00:22:21
different gender identity or whatnot
00:22:25
um it's also to think about you know
00:22:27
when we're recruiting a diverse board we
00:22:29
want everyone to bring different things
00:22:32
to the table and that's where I think
00:22:35
the the set of opportunities are for
00:22:36
boards today
00:22:38
so Stephanie it's
00:22:40
so exciting to speak with you it's so
00:22:43
reminiscent of
00:22:45
your professor David Thomas who started
00:22:48
the ward in school with me so many years
00:22:49
years ago so I am glad to have his
00:22:53
presence here in in your form in your
00:22:55
unique way it's uh it's also just just
00:22:59
the big takeaway for me is this idea of
00:23:01
thinking about the task of a board
00:23:03
member demographics being important I
00:23:07
also also think about this is not
00:23:08
shouldn't leave this is the last thought
00:23:10
but if you just just reverberated with
00:23:12
me as you said it I think about
00:23:14
uh
00:23:16
excuse the politics of this but I think
00:23:18
about what Thurgood Marshall was
00:23:20
stepping off the court and he was asked
00:23:22
whether or not his replacement needed to
00:23:24
be black and he said essentially you
00:23:27
know if it's a black snake or a white
00:23:29
snake it still bites I mean he wanted
00:23:31
somebody that had the presence to make
00:23:35
the decisions in the court
00:23:38
that we're looking out for the interest
00:23:40
of civil rights matters in a way that he
00:23:42
did no matter who that who that person
00:23:44
was and colorful The Guiding Light so I
00:23:48
appreciate every everything I've learned
00:23:49
from you today
00:23:52
thank you so much
00:23:54
thank you for listening to the ripple
00:23:56
effect we hope you found this episode
00:23:57
informative and engaging don't forget to
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Insight from the Wharton School
