Building a Board of Unique Strengths

Everyone leads from personal experience, and mine is rooted in being an immigrant. When I was a child, my family moved to the United States from East Africa. At the age of 14, I watched my parents sink every penny we had into buying a small motel just outside of Washington, DC, which my father and I worked together to run. Most of what I know about business today in terms of cash flow, economic profit, and, most importantly, how to treat people, comes from those early entrepreneurial days of working for our family-owned motel business. I have carried those skills and lessons with me through years of scaling larger businesses and serving on boards.

Yet, for much of my more than 30 years working in consumer brands, I felt like an outsider. Often, I was the only person of color in the room, as there weren’t many other Indians working in brand management, and I didn’t fit the typical mold of a brand manager. I don't have a booming voice, and I don't command people to do things.

What I did have was an outside perspective, which I have learned can be a superpower. An outsider can bring new insights and a new value to the industry in which they work. Being an immigrant shaped my leadership style and impacted how I assemble teams: at its core, I make sure that there is a diverse set of views and backgrounds on my teams. In my experience serving on public, private, and nonprofit boards for the last 20 years, and being at the helm of e.l.f. Beauty for the last 10, I’ve learned that the more diverse a board, the more unique strengths that board has with which to make the business stronger. Board diversity isn’t just good for people—it’s also profitable.

The power of having a diverse board lies in the competitive advantage that it brings to your business.

1.  A diverse board ensures that companies represent the communities they serve. According to McKinsey & Co.’s Diversity Matters Even More: The Case for Holistic Impact, companies with ethnically diverse boards are 13 percent more likely to financially outperform those without ethnically diverse boards, while companies with gender-diverse boards are 27 percent more likely to financially outperform their competitors without such boards. For example, e.l.f. Beauty is one of only two publicly traded US companies with a board that is three-quarters women and one-third diverse which is reflective of the community that we serve. Our company’s 22 consecutive quarters of net sales and market share growth are proof that it is good business to have a diverse board.

2. Outsider perspectives can help drive expansion. Diversity does not only encompass ethnicity and gender; it also encompasses diversity of thought and experience. People with different backgrounds and skill sets each bring unique values to the table and help push management’s thinking. Since a board is there to counsel and advise management from a macro perspective rather than being caught up in the day-to-day, it is crucial to have a diverse board that can view and assess the business from a variety of perspectives.

For instance, I serve on the board of Pharmavite, a science-focused company. When I joined the board along with Debra Sandler, who has extensive experience in consumer-packaged goods and a deep understanding of consumer behavior and the retail landscape, our combined consumer brand experience helped Pharmavite expand into women's health with the acquisition of Uqora, a urinary health brand, and Bonafide Health, a provider of women’s health products. We were able to bring a consumer-first perspective to the business, helping the team move beyond just looking at the company through a scientific lens. This helped Pharmavite refine its merger and acquisition criteria to become a richer, more comprehensive and well-rounded company.

3. A diverse board evolves the company at the speed of culture. The consumer is evolving faster than ever before, so companies should diversify their boards to drive faster change. As activism and competing interests continue to increase the demands on boards, the bar to understand people and culture is only getting higher. Recruiting board members and leaders who have experience in the rapidly changing business landscape, particularly with an understanding of global trends, can guide companies through the many unknowns they face in the current environment. 

When companies intentionally build teams and boards that combine people with different strengths, backgrounds, and perspectives, they inevitably foster robust, diverse, and forward-thinking cultures that match the world while fostering value creation.

e.l.f Beauty is a NACD partner, providing directors with critical and timely information, and perspectives. e.l.f. Beauty is a financial supporter of the NACD.

Tarang P. Amin is the chair and CEO at e.l.f. Beauty.