Board Diversity Beyond Gender and Racial Diversity
Board Diversity is becoming more of a topic as a result of significant changes in society and worldwide activism. Many companies have responded by increasing the proportion of women and minorities directors. However, some companies are going beyond the limits of racial and gender diversity by making sure they have cognitive diversity (the diversity of skills experience, perspectives and experiences on issues that improve decision-making).
A diverse board is more effective than a homogenous one. Boards with diverse backgrounds and abilities are able to solve complex issues in a fresh way and avoid the groupthink that hinders thinking.
Many activists and investors are searching for boards with more diversity. Having a board with different perspectives, experiences, and perspectives can help them respond to major changes in society quicker and better – for example, the rapid growth of environmental governance, social and (ESG) issues.
Boards with diverse backgrounds are more likely to be cognitively diverse. This means they can spot the issues within their organization quickly and more efficiently. If employees are able confront each other, they can better address these problems.
Having a diverse board is no panacea However, it is a good thing. Boards need to be able to collaborate despite their differences. This requires a chair who understands how to drive productive discussions and promote teamwork between people with very different views and perspectives. Otherwise it could lead to internal conflict and a decline in productivity.