New GM director appointments signal push for boardroom diversity

Kalea Hall
The Detroit News

Detroit — General Motors Co.'s move to add another woman and a man of Asian and African-American heritage as directors signals the Detroit automaker's commitment to diversifying its boardroom. 

The addition of Meg Whitman, 64, former CEO of Hewlett Packard, gives GM seven women on its now 13-member board. Mark Tatum, 51, deputy commissioner and COO of the NBA, also has been added to the automaker's governing board.

Meg Whitman, a technology leader and former head of Hewlett Packard Enterprise, to join General Motor Co.'s board.

"Nearly a year ago, I announced our ambition to be the world's most inclusive company," GM CEO Mary Barra said during an environmental, social and governance (ESG) conference sponsored by J.P. Morgan Thursday. "Much of that focuses on our own culture.

"But we've also viewed inclusion in the way we impact the world. Key to all of this work is a diverse and involved board of directors, which is continually refreshed with skill sets relevant to our vision and our growth strategy."

Mark Tatum, deputy commissioner and chief operating officer of the National Basketball Association, is joining General Motor Co.'s board of directors.

In the wake of demonstrations last summer protesting the death of George Floyd in Minneapolis, executives from the Detroit Three automakers and other major corporations in the city took a pledge to eliminate all forms of bias, racism, sexism and violence within their communities and companies.

For some, such as GM and Ford Motor Co., part of that process has meant intentionally working to diversify boards and executive leadership to meet public sentiment and investor expectations.

New GM logo

Research has shown diverse board rooms and C-suites can bolster a business' bottom line and potentially broaden both customer bases and investor appeal. The Harvard Business Review, for example, says companies with above-average diversity levels have on average 9% higher pre-tax margins.

GM notes in its 2019 sustainability report released last summer that 10 of the 11 board members identified as white and one identified as African American. GM had a majority female board even before Whitman's addition.

Whitman is probably most known for her tenure as CEO of eBay Inc. from 1998-2008 when the company went from $5.7 million to $8 billion in sales, according to Forbes. She was president and CEO of Hewlett-Packard Co. from 2011-2015 and then CEO of Hewlett Packard Enterprise from 2015-2018. 

During her time at Hewlett-Packard, Whitman oversaw the company's split into HP Inc. and Hewlett Packard Enterprise. The move "aggressively shed assets and cut tens of thousand of jobs," Reuters reported at the time. The move, one of the largest company splits in history, was met with some criticism

But Erik Gordon, a professor at the University of Michigan's Ross School of Business, said: "The criticism that has been hurled at Meg is exactly the kind of criticism you want to see hurled at a director. They criticized somebody who made the changes that a big company with a strong culture, a long proud history, had to make."

Whitman, who once ran for governor of California, most recently served as CEO of Quibi Holdings LLC, a short-form video platform that launched in 2020. It quickly failed, as Quibi struggled to gain an audience with consumers staying home during a global pandemic.

Gordon called Whitman "a real star addition" to the board, one that can benefit GM as it looks to its electric-vehicle driven future: "As GM starts to deal with smaller technology companies, she knows that world. She has dealt with small technology companies. She has dealt with HP, at the time a big, lumbering semi-has-been tech company."

GM's second new director, Tatum, has been the NBA's deputy commissioner and COO since early 2014. He is responsible for the NBA’s global business operations. He's also president of the NBA Foundation. 

GM CEO Mary Barra

Tatum "brings a strong track record of brand building and the foundation's work to empower black communities for employment and career advancement," Barra said Wednesday at the ESG conference.

Ford Motor Co. recently confirmed that two of its board members,  Edsel Ford II — a great-grandson of Henry Ford  — and retired Eli Lilly CEO John Lechleiter, are stepping down. Alexandra Ford English and Henry Ford III — great-great-grandchildren of Henry Ford — were nominated to fill the seats before a May 13 shareholder vote. 

According to Ford's 2020 sustainability report, the board of directors included three women, and two members of the 14-person board identified as part of a minority group. If the new board recruits are approved, Ford would have four women on its board and still two identifying as minority.

Executive Chairman Bill Ford said "the board expects to take steps to further strengthen and diversify its makeup, including in areas that are strategically critical in this important period of transformation and growth," according to a press release.

There are three women on Stellantis NV's 11-member board. Everyone is native to western Europe, Canada or the United States except for member Wan Ling Martello, who was born in the Philippines, according to the company's annual report. 

"Studies tend to show that you need three for it to make a difference in terms of gender diversity, I assume it's the same for racial diversity," said Cindy Schipani, a professor of business at the University of Michigan and expert in corporate governance, diversity and inclusion.

"Otherwise, one can be more like a token that no one listens to, [with] two it starts to get better, but by three ... then there's a real voice, and then difference can be made."

The push for corporate diversity at the executive and board level intensified last year during mass protests for racial equality following the death of Floyd, an African American man who died after a Minneapolis police officer knelt on his neck during an arrest. 

In September, California passed a law requiring California-headquartered public companies to have at least one board director who is part of an underrepresented community. The state also has a board gender diversity mandate. 

Schipani is in the middle of researching how compliant companies have been with the gender mandate. So far, her research has found companies are following the rules, she said: "They're bringing in women with experience, they're ... lifting up women in their own companies." 

Board diversity is important for companies to have representation of their own workforce, the consumers that buy their products and their suppliers, partners and communities where they operate, said Cheryl Thompson, CEO at the Center for Automotive Diversity, Inclusion and Advancement.

"The additions to GM’s board demonstrate intentionality and an appreciation for the benefit of the diversity of thought that can be achieved through diverse representation," she said.

The push for more corporate diversity hasn't only been made by society, Thompson added, but also by investors like Goldman Sachs. The Wall Street giant has refused to underwrite initial public offerings for companies if they don't have at least one diverse member on the board.

"The investors are working on this because they see the business case," Thompson said. "They're looking at the shifting demographics, and they're saying we're going to have this smaller and smaller talent pool if we're still focused on the majority white male."

Twitter: @bykaleahal