By Lauren E. Smith, Managing Director and Board Practice Member of Diversified Search

Boardroom demographics have changed little: of today’s Fortune 1000 directors, more than 1,100 are 70 years or older.

The world is moving at a different pace than it was a decade ago. And the next decade will continue to change at an extraordinarily rapid pace as employee bases become more diverse, consumers become truly global in their purchasing, big data and predicative analytics change everything we know and do, and technologies like 3-D printing change the ways we work, eat, learn, and play.

Today’s boards must prepare for the challenges of the 21st century. As directors think about strategy for the future, they should be taking a new approach that represents the values of the company and communities they serve. Boards need to be more transparent, more trusted, and more connected and engaged. When we think about companies that either went through bankruptcy or that no longer exist – like Polaroid, Kodak, and Motorola, Inc. – we have to wonder whether more diversity and different skill sets and knowledge in the boardroom at critical decision points might have kept these companies relevant. “We are coming into a new relationship era. Companies are engaging in different relationships with their customers, their employees, their investors, and their communities. Boards need to mirror this new way of interacting with a company’s many audiences,” said Jocelyn Carter Miller, director of the Principal Financial Group, Netgear, and Interpublic Group.

So how are boardrooms changing to ensure corporations are ready for the challenges ahead? The frightening fact is that boardrooms have seen very little change in their demographic trends over the past 20 years. Of the directors in the Fortune 1000, more than 1,100 are older than 70. More than 50 percent of public companies have no minority directors, and more than 60 percent have one or no women on their boards. Many boards lack the skill sets that would enable them to better understand cloud computing, cyber security, digital marketing, and their employees and consumers around the globe.

As a director, you may not be able to change the world, but you can make a difference in your own boardroom. Here are four ways to take action:

1. Get the conversation going: define diversity

Any journey begins with the first step. The first step in creating a board that is prepared to shape the strategy for the future is to start asking questions about what the future will look like, and then to assess the current board against the future state. Does the board reflect the consumer base? Understand how technology could support or undermine the business model? Embrace a global view of competitors and market opportunities? “You have to have the courage to talk about it,” said Greg Sweinton, executive chairman and former CEO of Ryder System, and director of Harris Corp. and Lennox International. “How can you make progress toward any objective if you don’t talk about where you want to head to? You have to discuss diversity and make it a part of the requirements for the slate.”

2. Champion the value of diversity

More diverse boards drive more diverse leadership and employees. A combination of viewpoints enables companies to better respond to changing customer requirements and to achieve greater financial performance. “Groupthink” is what happens when everyone in the room has the same mindset and lacks the perspective to challenge each other and provide alternative points of view. A broader dimension of skill sets and identities brings a fresh approach, and equips boards to make decisions that will work in today’s world as well as tomorrow’s.

Most directors will tell you about their firsthand experience of having diversity positively affect decision making in the boardroom. Additionally, a growing body of studies supports the benefits of diversity. Diversity has to be a conscious act. Often board members bring on people who are like themselves and with whom they are comfortable. If we want to change the face of the board, we have to choose to bring on people who are younger, from a different discipline, or from the opposite gender. “Having the ability to draw on a wide range of viewpoints, backgrounds, skills, and experience is critical to a company’s success,” said Evelyn D’An, director of Hot Topic. “So why wouldn’t boards today encourage diversity in gender, ethnicity, and industry experience as part of a boardroom renewal? The payoff – providing your company with valuable perspective and expertise – is well worth the effort.”

3. Define diversity and the skill sets of the future

NACD’s 2012 Blue Ribbon Commission Report on Diversity accurately explains that diversity includes both skills sets and identity differences. In terms of skill sets, we are seeing companies looking for candidates beyond the typical CEO or CFO profile. We are seeing the desire to add candidates that round out the knowledge base in the boardroom. Companies are adding chief marketing officers to gain a deeper understanding of consumer trends, chief information officers to better understand technology opportunities and risks, and chief people officers to bring more clarity to discussions about talent and culture. For example, the chief marketing officer at Kimberly-Clark Corp. was recently elected to The Hershey Co. board. The former chief information officer at GE was elected to the board of Hewlett-Packard. The executive view president of human resources at American Express was elected to the board of Kraft Foods Group, which, after the split in 2012, formed Mondelez International.

In terms of identity, progressive companies realise that different genders, ages, and ethnicities bring varied and valuable experiences, networks, and thought processes into the boardroom. Companies are finding that having both genders in the boardroom drives deeper conversation and prompts more questions as part of the decision-making. Companies are placing directors under 50 years of age on their boards to ensure that they become connected to technologically savvy younger generations. NACD recently published a list of 50 of these directors, including the CFO of Supervalu, who is 50 and joined the board of Deere & Co., and the chief business officer of Google, who is 44 and joined the board of Colgate-Palmolive. Companies also are more focused on adding Hispanic, Asian and African-American members so that they represent the changing mix of their customer and employee base. “No business is safe forever. Ryder just celebrated 80 years in business, but we have to keep renewing ourselves. You need to identify what is missing on your board to prepare for the future,” Swienton said.

4. Implement a robust and inclusive process

Search firms can help. The best place to start is by creating a skills and identity matrix that includes all of the competencies and constituencies you need to have in the boardroom to drive the strategy and prepare for the future. Consider how your company is impacted by gender, age, geography, and ethnicities, and think about how to reflect this on your board. Build the matrix and then fill in your existing board members qualities. Next, identify where you lack the right competencies and diversity. Based on those gaps, develop a candidate profile for new board members who can have high impact. To ensure that you reach a broad pool of candidates, engage a search firm, and communicate those skill and identity requirements. Be sure to push for candidates that meet both. “Search firms have access to a broader array of candidates than we could identify on our own,” Miller said. “The firm’s extensive database, contacts, and connections enable them to put together a slate of candidates that have the right skill sets and meet the diversity criteria we seek. I’ve found we get better results when we use a search firm to drive the process.”

Diversity means more than gender and race. Diversity in the boardroom today extends to personal differences in generations, geographic origins, professional disciplines, attitudes, values, and beliefs. These differences are what spawn new ways of thinking, looking at issues, solving problems, and meeting challenges. Go back to your boardroom and start asking questions about what is being done to prepare for a new and diverse future, the future of the 21st century.

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This article was first published in the September/October 2013 edition of NACD Directorship