Leading Diversity@Wharton hosted a panel discussion on diversity and corporate boards that drew over 100 students and community members Monday evening.
Titled “What can corporate boards really do about diversity?” the event featured 1994 Wharton graduate Jeff Smith, chair of Papa John’s International Inc; and Janet Foutty, chair of the board of Deloitte. Both panelists emphasized the importance of having diversity at all levels of a company, including the boardroom, and said this can benefit both society and the company itself.
The event follows recent controversy surrounding Papa John's after founder John Schnatter used a racial slur on a conference call in May and resigned as the company's chairman in July. During the event, Smith described the scandal and explained what the company is doing to create a more diverse culture. He said retired basketball player Shaquille O’Neal recently joined the board of Papa John’s, where his "eye-opening insights" and "different views on pricing and marketing" add great value to board meetings.
“We are trying to change a company culture that was far from ideal and make it into the ideal,” Smith said.
Both Smith and Foutty said companies are now trying to prioritize diversity in the boardroom, not only because it is a social good, but because it circles around to benefit the company as a whole. However, Foutty was cautious about placing mandatory diversity requirements on corporate boards.
“Boards have to be incredibly sensitive and aware of not falling into the tokenism trap,” she said.
Smith said one path for effective change involves shareholders sending letters to boards of companies demanding more diversity. Since board members are directly accountable to shareholders, this often leads to quick action.
“It took too long to start, but it is happening, and it’s not going to stop,” Smith said.
Foutty emphasized the importance of learning more about the governance of a company before joining it, particularly the diversity and role of the board. Smith agreed that looking at a company's social mission is important.
“How many of you care about the social purpose of the company you are working for?” he asked the crowd.
When most attendees raised their hands, Smith said the number of people in his class at Wharton who would have raised their hands would have been significantly lower. The speakers agreed that diversity in the workforce is accelerating because of how much Generation Z values it.
The panel was organized by Management professor Stephanie Creary, who studies diversity and identity. When introducing the speakers, Creary said she invited Smith and Foutty to speak because of their experience with diversity in leadership. Along with being the chairs of boards, Smith is CEO of Starboard Value LP, and Foutty is an advocate for women in technology.
Undergraduate and MBA students in Creary's course, "Leading Diversity in Organizations," attended the panel as part of their class. College and Wharton junior Becca Bean, a student in Creary's class and and founder of Wharton's Diversity and Inclusion Strategic Consulting club, said Creary encourages learning and discussion.
“She emphasizes that people come into this topic with different levels of expertise on it and makes it an open environment for those who may not have a mainstream opinion,” Bean said.
Wharton senior Tolu Adebayo, who is also in Creary's class, said she found the event applicable to her own future.
“I loved that I was able to have some take-aways that I can use in my post-grad life," Adebayo said." I loved what Janet said about how I can get involved with a not-for-profit like Him for Her, that helps with board diversity.”