Corporate Board Diversity

Investors, customers and the general public are demanding that the board of directors of a business reflect the demographics of the society it serves. Diversity in the board increases the effectiveness of a board, and can also create a more positive reputation as an employer. Diversity in corporate boardrooms means different things to different boards and companies.

Diversity is often defined in terms of gender and ethnicity. However, the advantages of diversity go beyond these traditional traits. Research suggests that boards with a wider mix of different experiences are less prone to groupthink. The idea is that directors with a variety of backgrounds and perspectives are better in arguing against their own views to produce solid discussions, stress-test alternative ideas and make more informed decisions than those with similar backgrounds.

It’s difficult to argue against the need for greater diversity in corporate boards, but it can be difficult for executives and board chairpersons to select the best candidates. Some advocacy groups offer lists of potential board members, but the candidates are often not part of the chairpersons networks or haven’t been considered for a position in the top management.

Boards can begin by conducting an audit of their current member profile. They can then utilize their annual evaluations to remove members that are no longer productive, and discover new talent who represent the future state of the business. They can also tap into their networks to find pioneers who aren’t part or all-inclusive director pool.

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