Corporate Board Diversity

An increasing number of customers, investors and the general public demand that the composition of a click here for more info company’s boards of directors reflect the demographics of the people it serves. The inclusion of diverse members improves a board’s effectiveness and creates an overall positive image as an employer. But diversity in a corporate boardroom may be different to various boards and companies.

Diversity is often defined in terms of gender and ethnicity. However, the benefits of diversity go beyond these traditional traits. Research has shown that boards with more diverse backgrounds are less likely to be at risk of groupthink. Directors with different backgrounds and perspectives are more able to debate each other’s opinions to generate solid discussions, test alternatives and make more informed decisions.

It’s not difficult to agree with the need for more diversity on corporate boards, but it may be a challenge for executives and chairpersons of boards to select the most qualified candidates. Some advocacy groups provide lists of potential board members, but these individuals aren’t typically part of the chairpersons networks or have never been considered for a position in the top management.

Boards can start by conducting an audit of their current members’ profiles. They can then utilize their annual evaluations in order to remove members that are no longer productive and to find new talents who represent the future state of the business. And they can tap into their advisors and consultants to identify individuals who aren’t part their homogenous director pool.