Companies still dragging their feet in adding a broader mix of people both demographically and in terms of professional experience could very well find themselves forced to do so by consumers and social activists. But they also risk incurring the wrath of by activist investors looking for a wedge with which to force change on a company in which they hold a stake.

“ESG (environmental, social, and corporate governance) is getting weaponized also now,” Christa Quarles, CEO of Corel, and a director on the boards of Affirm and Kimberly-Clark, told the conference in Half Moon Bay, Calif. “If you do not have diverse board members, what will happen essentially is that the activists will come and they’ll put their own slate.” Large institutional investors, she noted, will side with those proposals, seeing diversity as an imperative now, not just a nice-to-have. “You don’t want to be last on this issue.”

What’s more, differing voices will help CEOs grapple with the day’s thorniest issues. “Five years ago, you could choose to be involved or not be involved around social issues. Today, you don’t have a choice. You know, you’re going to be held accountable by your customers and your employee base,” said James White, whose directorships include Affirm, The Honest Company and Medallia.

But the directors also warned that diversity is not simply about demographics. Diversity in experience is also key, especially at a time of multiple crises (including the pandemic, supply chain issues, to inflation and questions about the future of work). “That’s a great opportunity for more diversity,” Laurie Yoler, a director at consumer goods company Church & Dwight and electronics maker Bose, said of supply chain expertise. (Yoler is also a general partner at venture capital firm Playground Global.)

“They didn’t need the seventh tech person (on the board), they actually needed somebody who had public company CEO experience,” said White of his directorship at fintech company Affirm.

Box, a software company, has seen firsthand the benefits of diversity, said Dan Levin, one of its directors who is also the CEO of Degreed. “The academic research is extensive, it is conclusive: diverse organizations outperform homogeneous groups of people every time in every measure. That’s it, we have to get active about this, we have to decide that it matters to us as business people.”

And once companies decide to take diversity seriously, momentum feeds on itself, the panelists agreed. “What I saw in my operating life is, you put a woman or a person of color in a leadership position, the diversity followed it. Suddenly it was there,” said Kirsten Wolberg, a board member whose directorships include Sallie Mae and Dynatrace.