Corporate Board Diversity

Customers, investors, and the general public are demanding that the board of directors of a business reflect the demographics of the community it serves. Diversity in the board increases the effectiveness of a board, and can also create an overall positive image as an employer. Diversity in corporate boardrooms means different things to different boards and companies.

The most commonly used definition of diversity focuses on ethnicity and gender, however the benefits of diversity extend beyond these conventional aspects. Research suggests that boards with a greater variety of experiences in the workplace are less prone to groupthink. The idea is that directors with different backgrounds and perspectives can better debate each other’s opinions to have solid discussions, test alternatives and make more informed decisions.

It’s hard to argue with the need for more diversity on corporate boards however, it can be a challenge for executives and board chairs to identify the most qualified candidates. Some advocacy groups offer lists of possible board members, but these individuals aren’t typically part of the chairs networks or have never been considered for a job in the top management.

Boards can begin by looking over their current member profiles. They can then make use of their annual evaluations in order to eliminate members who aren’t productive anymore, and identify new talent that reflect the future direction of the company. Additionally, they can use their advisers and consultants to identify individuals who aren’t part their standardized director pool.