Corporate Board Diversity

Customers, investors, and the general public are demanding that the board of directors of a company reflect the demographics of the society it serves. The inclusion of diverse members can increase a board’s efficiency and improve its reputation as an employer. However, diversity in a corporation’s boardroom may be different to different companies and boards.

Diversity is usually defined by gender and ethnicity. However, the benefits of diversity go beyond the traditional attributes. Research suggests that boards with a higher mix of functional experiences are less likely to fall prey to groupthink. The idea is that directors with a variety of backgrounds and perspectives are better in arguing against each other’s points of view in order to have solid discussions, stress-test alternative ideas and produce more informed decisions than those who have similar backgrounds.

It’s hard not to agree with the need for more diversity on corporate boards However, it can be difficult for directors and chairpersons to determine the most suitable candidates. Some advocacy groups offer lists of possible board candidates however they aren’t often in the networks of board chairs or have never been considered for top management post.

Boards can begin by reviewing their current member profiles. Then, they can utilize their annual evaluations to eliminate members who are no longer productive and discover new talent that matches the company’s future state. Additionally, they can use their network of advisers and consultants to identify trailblazers who aren’t part of their common director pool.