Ever heard of the Rooney Rule?
It has its origins in American football and basically stipulates that when sporting authorities are hiring for a head coach or general manager position, they must interview a ‘minority’ applicant with the relevant qualifications and experience (there are no quotas given to minorities when hiring). Named after Dan Rooney, former owner of the Pittsburgh Steelers and former chairman of the NFL’s diversity committee, the rule is increasingly being used across several other industries.
Shareholders in online commerce giant Amazon recently put forward a proposal to implement a version of the Rooney Rule, requiring that an initial list of candidates should include qualified women and minority candidates.
In advance of the shareholder vote for the proposal, Amazon’s board recommended a vote against the proposal on the basis that “the Board believes that adoption of the policy requested by the proposal would not be an effective and prudent use of the Company’s time and resources.” Following employee and shareholder outrage, the board subsequently announced that it would adopt the shareholder diversity proposal.
We’ve all heard the often-quoted line that there are more CEOs of large US companies who are named John (5.3%) than there are CEOs who are women (4.1%). Whether its unconscious (or conscious) bias that influences hiring decisions, the reality is that people have a bias in favour of the status quo – because 95% of CEOs are white men, the status quo bias can lead board members to unconsciously prefer to hire more white men for leadership roles.
Further research into status quo bias, outlined in an article in Harvard Business Review, shows that when there is only one woman or person of colour in a finalist pool of job candidates, that candidate stands out so much that they have essentially no chance of being hired. Basically, interviewing one woman, as dictated by the Rooney Rile, would not create change.
Interestingly, what the research also found was that interviewing two women or minority candidates can make a difference and lead to their hiring. This suggests that mandating diverse candidate ‘quotas’ can improve diversity overall.
If your organisation is afraid of ‘creating token candidates’ – individuals who are interviewed based on diversity but have no real chance of being considered – remember that interviewing more than one might create change.
Research makes it increasingly clear that companies with more diverse workforces perform better financially – due to diversity of thought, a more comprehensive understanding of the customer base, and reduced groupthink etc. If you are a CEO however, beware – the same research also suggested that demographically diverse boards are more likely to challenge the authority of the CEO and curtail CEO pay.
The takeaway from this article is that regardless of whether you are selecting a board or hiring a new member of the leadership team, status quo bias is hard to overcome. You can however reduce this risk by using external specialists to assist with your recruitment needs.
If you are looking for direction and assistance on unearthing the right talent for your business, get in touch with us. We’d love to chat.
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