Corporate Board Diversity

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 inclusion of diverse members will improve the efficiency of a committee and improve its reputation as an employer. Diversity in a corporate boardroom can mean different things to different boards and businesses.

The most commonly used definition of diversity includes gender and ethnicity, but the benefits of diversity go beyond these conventional traits. Research suggests that boards that have a diverse set of functional backgrounds are less likely to be susceptible to groupthink. The idea is directors with different backgrounds and perspectives are able to better challenge each other’s perspectives to create solid discussions, the possibilities and make more informed decisions.

It’s hard to argue against the need for more diversity on a corporate board but it could be difficult for executives and board chairs to identify the most suitable candidates. Some advocacy groups provide lists of potential board candidates however, they aren’t often included in the networks of chairpersons or have never been considered for top management positions.

Boards can begin by looking over their current member profiles. Then, they can utilize their annual evaluations to remove members who are no longer productive and find new talent that matches the future direction of the company. They can also tap into their advisors and consultants to find trailblazers who aren’t part of their homogenous director pool.

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