Corporate Board Diversity
Customers, investors, and the general public are insisting that the board of directors of a business reflect the demographics of the community it serves. The inclusion of diverse members improves the effectiveness of a board, and can also create an overall positive image as an employer. Diversity in corporate boardrooms can mean different things to different boards and companies.
The most commonly used definition of diversity includes ethnicity and gender. However, the benefits of diversity go beyond these traditional characteristics. Research shows that boards with more diverse backgrounds are less likely to be prone to groupthink. The idea is that directors with diverse backgrounds and perspectives are more in arguing against each other’s points of view to create solid discussions, stress-test alternative ideas and make more informed decisions than directors with similar backgrounds.
It’s difficult to argue against the need for more diversity on corporate boards, but it can be difficult for executives and board chairpersons to select the best candidates. Some advocacy groups offer lists of possible board members, but the candidates aren’t usually part of the board chairs networks or have never been considered for a job in top management.
Boards can begin by conducting an audit of their current profile. Then, they can use their annual evaluations in order to eliminate members who aren’t productive and to find new talent that is reflective of the company’s future state. They can also tap into their networks to find trailblazers that aren’t in their uniform director pool.