Corporate Board Diversity
An increasing number of customers, investors and the public demand that the composition of a company’s board directors reflect the composition of the people it serves. Diversity in the board can increase a board’s efficiency and boost its credibility as an employer. Diversity in a corporate boardroom can mean different things to different boards and businesses.
The most popular definition of diversity includes ethnicity and gender, however the benefits of diversity extend beyond these typical characteristics. Research shows that boards with a more diverse background are less likely to be prone to groupthink. Directors with different backgrounds and perspectives can better challenge each other’s viewpoints to have robust discussions, the possibilities and make more informed decisions.
It’s not difficult to agree with the need for more diversity on a corporate board however, it can be challenging for executives and board chairs to identify the most suitable candidates. Some advocacy groups offer lists of possible board members, but these candidates are typically not part of the chairpersons’ networks or haven’t previously been considered for a job in the top management.
Boards can begin by conducting an audit of their current members’ profiles. They can then use their annual evaluations to remove members who aren’t productive and to find new talent that matches the company’s future state. They can also use their advisers and consultants to identify the trailblazers that aren’t part of their homogenous director pool.