Corporate Board Diversity
Investors, customers 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 enhance its image as an employer. But diversity in a corporate boardroom may be interpreted differently by different companies and boards.
Diversity is often defined in terms of gender and ethnicity. However the benefits of diversity go beyond the traditional attributes. Research suggests that boards with a higher mix of functional experiences are less prone to groupthink. The idea is that directors with a variety of backgrounds and perspectives are better able to challenge each other’s points of view in order to generate robust discussions, stress-test alternatives and make www.board.international/how-to-encouraging-an-effective-advisory-board/ better-informed decisions than directors with similar backgrounds.
It’s difficult to argue against the need for greater diversity on corporate boards However, it isn’t easy for board chairpersons and executives to determine the most suitable candidates. Some advocacy groups provide lists of possible board candidates but they’re not often part of the networks of chairpersons or have not been considered for top management post.
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 are no longer productive and identify new talent that reflect the future state of the company. They can also leverage their network to identify the trailblazers who aren’t part of their group of directors.