Corporate Board Diversity

Customers, investors, and the general public are demanding that the board of directors of a company reflect the demographics of the community it serves. The addition of diverse members can boost the efficiency of a board and boost its standing as an employer. But diversity in a corporate boardroom could be different for different boards and companies.

The most common definition of diversity is gender and ethnicity, but the benefits of diversity extend beyond these typical traits. Research shows that boards with more diverse backgrounds are less susceptible to groupthink. The idea is that directors with a variety of backgrounds and perspectives are more in arguing against each other’s points of view to produce strong discussions, stress test alternative strategies and make better informed decisions than those with similar backgrounds.

It’s difficult to argue against the need Corporate Board Diversity for more diversity on corporate boards, but it may be difficult for executives and board chairs to choose the most qualified candidates. Some advocacy groups provide lists of potential board members, but these individuals aren’t typically part of the chairpersons networks or have never been considered for a job in top management.

Boards can start by conducting an audit of their current profile. They can then use their annual evaluations in order to remove members that are no longer productive and to find new talents who reflect the future direction of the company. They can also tap into their network to identify trailblazers that aren’t in their uniform director pool.