Advocating for Greater Diversity and Inclusion in the Boardroom

Women-held board seats. Workplace equity. Global South inclusion. These are efforts that Dimple Sahni has been thinking about for decades.

An impact investor, entrepreneur, and venture capitalist, Dimple was born and raised in India before she and her family moved to the US when she was six. It was then, as a young girl, that she started to see how her life was diverging from that of her relatives, especially her female cousins. “I knew early on that I would do something that would level the playing field for people whose families couldn’t move to a super-power country and who didn’t have the same role models,” says Dimple.

That drive has led her to build a global career that has crossed the sectors of finance, technology, emerging markets, and social impact. Dimple started her work in finance at Goldman Sachs when it was still private. She then launched an education-focused social enterprise which was sold to Accenture and then, out of Wharton business school, worked as a Kauffman Fellow at L Capital Partners, a technology, healthcare fund, before fully diving into the world of impact investing. Today Dimple—who is now based in The Netherlands—is the Managing Director of Impact Funds Portfolios at Anthos Fund and Asset Management and is razor-focused on infusing true diversity into the boardroom landscape for both private and public companies.

Recently our founder, Eva Yazhari, sat down to video chat with Dimple about the outlook of boardroom diversity and what women need to do to claim more seats. As an Indian American woman who lives in Europe and has invested globally, Dimple sees giving board opportunities to those too often overlooked as not only critical, but also “a very personal journey.”

A Conversation with Dimple Sahni

Let’s start off with a macro view of the boardroom landscape in terms of inclusion. The upside is that we’ve been seeing improvement in the percentage of women-held corporate board seats, as well as an increase in board diversification. More than 20 percent of global board seats are currently held by women. This is great, but it is still unbalanced. What are you seeing?

As with any industry where you’re trying to get more women to be in their senior levels, it starts with the pipeline and the funnel. We’re seeing a new batch of entrepreneurs who are getting operating experience, and women who are taking companies public or selling them. We’re seeing more and more women not only getting into financial services but actually staying in financial services and making it to the partner, GP level, or even at the LP level. So it is changing—but it's slow. The challenge and the asymmetric divide between what should be happening and what’s actually happening is due to how that funnel works—and we are the bottlenecks in that funnel.

When search firms get assignments for recruiting women on boards, whether it’s private or public, all they can give is a shortlist of candidates. The decision makers are still the existing board members, most of whom are white men. And not surprisingly, it’s very primal to pick someone who looks like you, talks like you, comes from your background, school, et cetera. So it becomes a self-fulfilling prophecy, even if you have the best of intentions.

Through more informal channels, all that networking is also still done within a very few circles. One thing that women can start to do more of is not only find mentors, but also find sponsors. And there’s a difference. The level of activism is different. They can find someone who is going to actually advocate for you, think of you when that board seat becomes open, and make sure you’re not just on the shortlist but likely to become a final candidate.

There’s also this misperception of North America versus Europe—and Asia is not even on the map, neither is Africa. The large cap companies, the more visible companies that have had more news headlines, that’s still North America-centric with a little in Europe. Now that we have a woman in the White House, I have to think there will be  ripple effects of thoughts on governance. Because it starts with government, then it spills into the private sector. We just had a new head of US Bank; Jane Fraser of Citi. We have more females in positions of power in the government, more that will increasingly be at the helm of companies, so that Forbes list of women will continue to increase.

I think the delta and the dynamism of change will happen more in the next five years than it has in the last fifteen years.

You’ve touched upon how efforts to diversify boardrooms are more concentrated in certain global regions than others. Smaller countries like Finland have made great progress while other nations have made no effort. How does this disjointed effort impact governance and economy on a global scale? What barriers does it create that may or may not be known?

I’m in an interesting position because I’m an Indian American who is living in Europe. So when I think of my board career and my competitive advantage, in Europe I am the diversity because I am Indian American with pedigree, and experience from North America. Or one might ask is my competitive advantage now as a European resident and global investor with experience in ESG and sustainability, where Europe is further ahead?

I think the future of boards and  board composition are all-around athletes, who are global citizens, are multilingual, multicultural, and have experience in multiple geographies.   One wants to be able to leverage from what you learned in North America, topped with what you know from Europe, and what you’ve been investing in in Asia, Africa and Latin America. That’s a more comprehensive perspective to bring to any board. And themes like sustainability aren’t vertical, they’re horizontal—they cut across everything. The new board makeup and membership is going to be very different. You want people who are empathic, and not just the CEOs who have used sharp elbows to make their way to the top. People who have more soft skills, and then also have a global multifaceted perspective—so they won't be at a disadvantage.

What are you starting to see in terms of people making change and waking up to this issue?

Finally there is a confluence of these macro-movements in the industry, #times up #me too #black lives matter, which are having to do with diversity and inclusion which affects everyone. So the change you want to see in the boardroom has to be representative by that interconnectedness of everything. The silver lining of the Black Lives Matter movement brought diversity and inclusion back to the surface. Kamala Harris broke the ultimate glass ceiling. You have to  be more mindful: when addressing people: when to leverage your ethnicity, race or gender from a position of strength instead of vulnerability. 

People are learning how to be more nuanced. It’s present in every conversation because everything is interconnected and it is being reflected in the world right now.

What are you most focused on for the solutions—and why?

I have built a career in financial services and learned how to be “one of the guys” because I wanted to be taken seriously as an investor and not just as a ‘female’ investor. I wanted my track record to speak for itself.

I have been the diversity in many forms. In North America I am diverse being of Indian American heritage and being first generation immigrant. In Europe I’m diverse because I don’t have deep roots in Europe and up until recently, little cultural or lingual fluency. I’ve learned this last year about how to find the silver linings of George Floyd’s death and the cultural movements that I mentioned earlier.  People now own who they are in a way that hasn’t been done in a very long time, if ever. And people are more receptive to it. So I’m leaning into my gender and I’m leaning into my ethnicity, as well as other forms of diversity however that’s defined—because it could be age, also. I’m leaning into these dimensions from a place of strength rather than being guarded.

Also, it’s about finding active male sponsors. Men know they’re part of the solution and that they have to be part of the solution. I’ve had more receptive conversations with men who are saying, we’re willing to help; when we hear of something we’ll send it your way. I also think there’s so many programs for women on boards, private and public. It’s become virtual. Access to the education one would need to be board-ready is changing and becoming more ubiquitous. And people are sharing opportunities. There is a lot more openness. Covid, which brought everyone to their knees, has really brought out the humanity of people, professionally and personally. So there’s a spirit of collaboration in sharing positions and opportunities. The virtual world level-sets for everyone. These are the things that all have to be part of the solution.

The first board seat may be hard. How do you know when it’s right and that board will provide you with what you’re looking for?

What I’ve been told by mentors is that the company is something you have to be passionate about. If it’s an industry you can’t relate to, or a product or service you don’t use, you can’t be a critical board member because you can’t understand it. You won’t be able to really get behind it from an understanding perspective.

Values are also important. The chemistry with the existing board members and the operating management. Are you on the same page or are they coachable? Some people say they want to change, but when you bring up change they shoot it down. Knowing that people are malleable, even the old boys network, and are open to having change happen in the boardroom.

Then what is your story?  How are you going to extract value from the board opportunity? Because it helps if you’re quite clear, and you’ve come up with a board bio or value proposition of what you can bring.  Think about: Even if it’s a tiny company but it happens to be public, perhaps you can influence it in a more profound way as the company grows? Can I take them private and then public again? Can I institute ESG as a formal committee? Can I leave my own imprint and legacy even after my term on the board. Because then it's an amplification effect. It matters less where the company is at and more about where it’s going.

Any other strategies for finding and landing that first board seat?

Another strategy I’ve thought about is in my local market. Can I start with the daughter company of a more well-known multinational name, like the Dutch headquarters of Uber or the Dutch headquarters of Nike. These are products and services that I use. They need local governance and boards, so I can bring that perspective there. Uber has to have a sustainable strategy because of the cars that are being used, as well as the food vertical with Uber Eats. And for Nike, it’s about sustainable apparel. The great thing about sustainability and ESG is that you can bring the relevance down to any industry level because it permeates every type of business.

A micro-cap company where I can add extraordinary value—maybe that can go from a small exchange to a larger exchange in the future. Do you want a diamond in the rough or a well-formed diamond? It’s a very personal choice. And you have to consider how much energy you have to give and how many board seats you want. Also the sequential order of it. Maybe your own risk profile is that you want to go for a more stable board for the first position and learn and then you go for a more entrepreneurial, less formed board as your second or third board position. These are the things one may want to think about. 

Diversity in the boardroom is essential. But it can’t stop there. What else do companies need to do to make sure they’re being proactive about equity and inclusion overall?

It’s about the ways of working. The flexible work environment, which a lot of companies have had to inculcate: It is about keeping that in place or some version of it even after this pandemic. That means for those who are less able to travel, less able to work full time, they can still be an essential part of your workforce and your boards.

As it relates to women, it’s about continuing to foster mentorship or sponsorship programs so that you’re promoting high-level high potential women. It’s okay to have a program that calls that out because it shows you’re aware. Institutionalizing programs like this in house really help.

It’s also about addressing pay gaps and being up front about how you’re reporting on it. Money is a byproduct of everything else. If there is a gender pay gap there are other types of gender and diversity gaps in your business model. You can start with that and then address the more fundamental issues of why more senior women of color aren’t getting promoted etc. Those statistics—the gender pay gap; the non-Caucasian pay gap—haven’t changed much.

Then it flows to the business. Are you addressing underserved markets with your products and services? What are you doing to go out there and bring your products to rural communities, and under-served communities? What are you doing to bring down your price points and to have a spectrum or a range of product offerings that shows you’re being inclusive to the consumers? And then all the way up to the board room and hiring more diverse board members who ensure and are held accountable for all the changes throughout. 

You’ve mentioned ESG committees. Will you talk more about that?

The standard sub-committees on boards are typically audit, nomination, compensation, risk and some governance committees. I do think the world is going to ask for public companies to have ESG committees. I’m seeing it now in some private equity funds in our portfolios that have impact advisory councils to make sure that, from an impact standpoint, we provide guidance on what impact reporting, monitoring and evaluation, impact audits all look like. So I think that impact and sustainability are going to infiltrate the audit side of financial services and how your company is viewed in the public markets, but also in the way that it works: what’s your carbon footprint and how many of your executives are traveling.

So the constitution of an ESG committee and the large scope of what that represents, from the way you work to products and services and how they’re built and provided to what you are doing to improve on the environment will be the way of the future. The ESG committees that will be constituted will address the status quo but then develop a project plan for how companies can continue to do better. I think Impact investors are poised to be the first members of those subcommittees. And there’s a lot of women in impact investing, so a great way to constitute your ESG sub-committee is to tap into the impact investing world because there’s a lot of great ethnically and gender diverse candidates.

How can non-board members fight this fight?

Get educated. Keep evidence of the people you know who are stars in what they do: Diverse and inclusive candidates. Operators. Investors. Think about new channels. Social media can be a friend here: Podcasts. WhatsApp. Slack channels. Virtual conferences. The messaging and branding now can be spread a lot more. What was a closed network between a few circles before should be a broader network that  share board positions more freely and acting to make diversity a clear filter.

In 2021, everyone can do some activism in their own way. Referring good candidates, by talking to the board members that they know. And planting the seed in candidates that are unlikely board members that they could be potential board members. There’s probably a lot of sleeper board members who wouldn’t even consider it because they don’t think they look right or have the right background.

We should continue to break barriers. Let people from the Global South see that they have now role models that have broken through those ceilings and they could be the next generation of leaders.

To learn more about Dimple Sahni, click here.

At The Conscious Investor, it is our goal to shed light on topics that we find interesting, inspirational, and educational. Therefore, this article is strictly for inspirational and informational purposes only. It is in no way intended to substitute for professional investment advice, professional financial advice, or general counsel. To the extent that an article features the insight, opinions, or advice of an expert or company, the expressed views are those of the cited person or company and do not necessarily represent The Conscious Investor and its employees or affiliates.