Corporate Board Diversity
A growing number of customers, investors and the general public demand that the composition of a company’s boards of directors reflect the demographics of the people it serves. Diversity in the board will improve the efficiency of a committee and boost its credibility as an employer. Diversity in a corporate boardroom means different things to different boards and businesses.
The most popular definition of diversity involves ethnicity and gender, but https://board.international/how-to-encouraging-an-effective-advisory-board/ the benefits of diversity extend beyond these traditional aspects. Research shows that boards with more diverse functional backgrounds are less at risk of groupthink. The theory is that directors with diverse backgrounds and perspectives are more able to challenge their own views to produce strong discussions, stress test alternative strategies and make better-informed decisions than directors who have similar backgrounds.
It’s difficult to argue against the need for more diversity on a corporate board but it could be difficult for executives and board chairs to identify the most suitable candidates. Some advocacy groups offer lists of potential candidates for board positions however, they aren’t often in the networks of board chairs or haven’t been considered for the top management post.
Boards can begin by conducting an audit of their current profile. They can then utilize their annual evaluations to remove members that aren’t productive anymore, and identify new talent that reflect the future state of the business. Additionally, they can use their network of advisers and consultants to find trailblazers who aren’t part of their homogenous director pool.
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