When the music industry halted business in June to reflect on systemic racism, former BET chairman/CEO Debra Lee knew exactly where she wanted to get to work: corporate boardrooms. “That’s where the power is,” says Lee, who in January launched consulting firm The Monarchs Collective with the goal of putting more BIPOC folks in those advisory and leadership roles. “It’s amazing how many people don’t know about boards or the benefits of serving on a board.”
Serving on a board gives executives access to an array of perks that boost careers and bank accounts: fees, company stock and invaluable networking opportunities. Acting as a fiduciary to the shareholders of public companies, board members can also use their authority to fire senior executives. The 2020 U.S. Spencer Stuart Board Index reported that the average total compensation for nonemployee directors (excluding independent chairs) is around $308,462, which mostly comes from stock grants, as well as cash payments.
Having diverse boards pays off for businesses too. A 2020 McKinsey & Company report found that companies with leadership in the top quartile for gender and ethnic/cultural diversity were respectively 25% and 36% more likely to have financial returns above the industry median.
“A genuinely diverse board isn’t just the right thing to do, it’s a commercial and creative imperative that leads to higher revenue and returns,” says Nexus Management Group founder Ceci Kurzman, who joined Warner Music Group’s board of directors in October, in a statement to Billboard. “All companies should aspire to having a board that sets an example by representing all stakeholders, including its employees, shareholders and consumers.”
The music industry hasn’t been leading the charge, however. Public music companies such as Live Nation, which has two female members and two members of color on its 12-member board of directors, published open letters in June and July that pledged to diversify further. Spotify’s 10-member board has three female members and two members of color. SiriusXM had no one of color and only two women until its new CEO, Jennifer Witz, and Jonelle Procope, president/CEO of Apollo Theater, joined the 14-member board in the past year. And WMG, which went public in June, had no one of color and only one woman on its 11-person board of directors until Kurzman joined. The boards for Vivendi and Sony Corp., the parent companies of Universal and Sony Music, also have room for improvement when it comes to mixing up their ranks. Vivendi’s two-tier governance system has no woman or no member of color on its 7-member management board and seven women and one member of color on its 13-member supervisory board. Sony Corp.’s has four women on its 12-member board of directors, the majority of whom are Asian.
“When you see how a lot of companies reacted to the Black Lives Matter movement, people were caught flat-footed. And I feel like the automatic answer was, ‘Let’s throw some money at it,'” says Troy Carter, founder/CEO of Q&A who currently sits on the boards of WeTransfer, The Aspen Institute and LACMA. “But if the right boards were in place, and the value systems were aligned with the employee base, then you wouldn’t have these problems of having to go out and find Black executives or look to promote Black executives in roles that you never thought about for them before. So I think a lot of these companies were reactive to the situation versus thinking about it through the lens of their constituents.”
I DONT HAVE A BOARD SEAT AT GAP I DONT HAVE A BOARD SEAT AT ADIDAS … BLACK BOARD SEATS MATTER
— ye (@kanyewest) September 10, 2020
Artists such as Kanye West have been vocal about the lack of diversity in corporate boardrooms. He tweeted in September about not being on the boards of either Adidas or Gap, writing, “BLACK BOARD SEATS MATTER.” Nine days before his epistle, a shareholder derivative lawsuit was filed against 14 board members at Gap and the company itself for failing to ensure “diversity at the top of the Company” and “equal opportunities for Black and other minority workers.”
Larry Jackson, global creative director of Apple Music, has already created meaningful change at ServiceNow three months after being appointed to its board of directors last October. He helped launch the $100 million ServiceNow Racial Equity Fund this week. “To me, being on a board of directors is being able to get things done at a high level, C-suite level, and really being able to move the ball,” he says. Jackson also currently sits on the board of the Hammer Museum. When it comes to the upper echelon of music companies, he’s holding onto “a glimmer of hope.”
The lack of diversity on music industry boards is “really heartbreaking in an industry that’s built on the backs of Black music and Black artists,” says Lee. “If we’re not addressing all companies on that level, things are never going to change.”