Corporate Board Diversity
An increasing number of customers, investors and the general public demand that the composition of a company’s board of directors reflect the people it serves. The addition of diverse members can improve the efficiency of a board and boost its credibility as an employer. However, diversity in a corporate boardroom could be interpreted differently by different boards and organizations.
The most common definition of diversity is gender and ethnicity, but the benefits of diversity extend beyond these conventional characteristics. Research suggests that boards with a more diverse diversity of experience are less prone to groupthink. The idea is that directors with different backgrounds and perspectives are more able to challenge each other’s perspectives to have solid discussions, examine alternatives and make informed decisions.
It’s hard to argue against the need for more diversity on a corporate board however, it can be difficult for executives as well as board chairpersons to determine the most suitable candidates. Some advocacy groups offer lists of potential board candidates, but they are not often in the networks of board chairs or haven’t been considered for the top management positions.
Boards can begin by auditing their current member profile. Then, they can utilize their annual evaluations in order to eliminate members who are no longer productive and find new talent that is reflective of the future direction of the company. They can also leverage their network to identify pioneers who aren’t part or all-inclusive director pool.