Corporate Board Diversity

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October 26, 2023

Corporate Board Diversity

An increasing number of customers, investors and the general public are demanding that the composition of a company’s board directors reflect the people it serves. Diversity in the board will improve the efficiency of a committee and improve its reputation as an employer. But diversity in a corporate boardroom could be different for different boards and organizations.

Diversity is often defined in terms of gender and ethnicity. However the benefits of diversity extend beyond these traditional characteristics. Research suggests that boards with a more diverse mix of functional experiences are less prone to groupthink. The idea is directors who have different backgrounds and perspectives are more able to confront each other’s views to create solid discussions, the possibilities and make more informed decisions.

It’s hard to argue with the need for more diversity on corporate boards but it isn’t easy for directors and chairpersons to find the most qualified candidates. Some advocacy groups offer lists of possible board members, but the candidates aren’t usually part of the board chairs networks, or haven’t been considered for a job in the top management.

Boards can begin by reviewing their current member profile. They can then make use of their annual evaluations to remove members that are no longer productive, and discover new talent who reflect the future direction of the company. They can also leverage their network to identify trailblazers that aren’t in their group of directors.

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