Corporate Board Diversity

Corporate Board Diversity

A growing number of investors, customers and the general public demand that the composition of a company’s board of directors reflect the makeup of the people it serves. Diversity in the board can improve the efficiency of a board and boost its standing as an employer. Diversity in a corporate boardroom can mean different things to different boards and companies.

Diversity is often defined in terms of gender and ethnicity. However the benefits of diversity extend beyond the traditional attributes. Research suggests that boards with a greater diversity of experience are less likely to fall prey to groupthink. Directors who have different backgrounds and perspectives are able to better challenge each other’s viewpoints to generate solid discussions, test alternatives and make more informed decisions.

It’s hard to argue with the need for more diversity on corporate boards however, it can be a challenge for executives and board chairs to identify the most suitable candidates. Some advocacy groups offer lists of potential board candidates but they’re not often in the networks of chairpersons or have never been considered for top management positions.

Boards can begin by conducting an audit of their current profile. They can then make use of their annual evaluations to eliminate members who aren’t delivering, and to find new talents who reflect the future state of the company. They can also use their network to identify the trailblazers who aren’t part of their all-inclusive director pool.

corporate board diversity