A diverse boardroom for a diverse customer base
“The only way to satisfy diverse customers is to include their perspectives inside the company.”
To be quite honest we could almost start and end this article with that one quote from Ford CEO Alan Mulally in 2010. He saw diversity as being “the only business case we need,” recognising that for companies to be truly in step with their customers they have to rise above the metrics. And what better way to do that than to have a boardroom which represents, understands and can truly empathise with customers?
Now I can hear you saying ‘surely that’s what boards are supposed to do anyway.’ After all, doesn’t the Companies Act 2006 say that directors have a duty to promote the success of the company, and this includes fostering the company’s business relationships with customers? The trouble is that some boards still see the customer relationship in purely transactional terms; seeing customers solely as amorphous units who will buy the products which the company decides to sell.
But that’s not a relationship. It may be a one-way product flow in return for cash but it is so arm’s-length, impersonal, and potentially exploitative that if you were to have the temerity to call it a relationship, it would have to be a toxic one. No, the cold truth is that if you want to have a true relationship with your customers, to design and deliver products and services which meet their genuine needs and to do so in a way which promotes customer excellence, then the entire organisation has to be in step with its customers. And that starts at the top.
Forget for a moment the fact that boardrooms are prone to falling under the spell of groupthink. Forget even that they have a wide range of responsibilities, being accountable to shareholders and the wider constituency not only in respect of profitability but also sustainability, risk and social impact. Whatever and wherever the board focus falls, if they don’t get the customer focus right then nothing else matters.
Balance the board
So the key to success lies in balancing the board, drawing in a range of skills, experiences and abilities, so that it not only is in a position to promote the interests of the company but also best represents the customer base. And that balance isn’t simply a question of meeting some sort of quota in terms of age or gender or ethnicity. A truly balanced and diverse board should also look towards areas such as experience and background and outlook.
Interestingly the latest Quoted Companies Alliance (QCA) revision of the corporate governance code highlights this in their ten principles of corporate governance with number five being to ‘maintain the board as a well-functioning, balanced team led by the chair’ whilst number six looks to ‘ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.’
Your customers are the lifeblood of your success. Unless you are a single customer company then it’s a fair bet that there will be some element of diversity in your customer base; and the larger that base, the greater the chance of diversity. So isn’t it time that you started to ensure that the perspectives of your diverse customer base were truly reflected within the company? When you really understand your customers then great things can happen.
Director of Elemental CoSec, a company secretarial firm. Lawyer. Triathlete.
Elemental is one of the leading corporate services firms in the UK, providing company secretarial services, administrative services, accountancy services and corporate services to a full range of clients.
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