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Fifth Third's Somalya on Diversity in Governance

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Published: July 23rd, 2020
Saema Somalya, deputy general counsel at Fifth Third, says board diversity is a key tool for corporate competitiveness.

Diversity is an issue of reputational importance for companies, but it’s also critical to their economic well-being, says Saema Somalya, the deputy general counsel of Fifth Third Bancorp (FITB), who will discuss the role of corporate governance and corporate boards in diversity and inclusion on Tuesday, July 28, at 3 p.m. as part of The Deal Economy’s Middle Market Week.

“To be viable in the long term,” she says, “you have to be able to anticipate trends and even create them, and the best way to do that is to have a diversity of perspectives at the table when analyzing problems and opportunities. To reference my own industry, the business landscape for banking is evolving rapidly, and to think we are going to meet that challenge with a homogeneous employee base or groupthink would be foolhardy.”

Corporate boards have an opportunity to go beyond traditional networks when recruiting new talent, says Somalya, who advises the Cincinnati-based bank’s executives and board on corporate governance, securities and regulatory issues. While CEO experience will always be an important qualification to have on corporate boards, skills such as technology, marketing, human resources and government affairs can expand the board’s ability to provide meaningful oversight and broaden perspectives offered by gender, racial and ethnic diversity because there are more minority leaders in these areas.

On July 20, Fifth Third announced that it had added to its board of directors Linda Clement-Holmes, the former chief information officer at Procter & Gamble Co. (PG) and P&G’s first chief diversity officer. Clement-Holmes, who is Black, gives Fifth Third five women and three ethnic minorities on its 15-member board. Says Somalya: “The utilization of a qualifications-based approach to director succession planning and recruitment opened new opportunities to broaden the board’s racial and gender diversity and, by doing so, strengthen its ability to provide meaningful oversight on technology and innovation. This process involved consideration of old networks, new networks and also of old networks in new ways.”

Somalya expects more shareholder activism around board diversity, especially with increasing interest in ESG-focused investing. While that activism probably won’t lead to no-vote campaigns at most companies, it will have reputational implications for companies, says Somalya, who was a senior legal director and corporate counsel in the law department at PepsiCo Inc. (PEP) from 2009 to 2014 and the general counsel at Warren Resources Inc. from 2014 to 2016, when she moved to Fifth Third.

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