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Corporate Board Diversity

Corporate Board Diversity

Corporate Board Diversity

A growing number of customers, investors and the general public demand that the composition of a company’s board directors reflect the demographics of the people it serves. Diversity in the board increases the effectiveness of a board, and can also create a more positive reputation as an employer. Diversity in a corporate boardroom can mean different things to different boards and businesses.

The most popular definition of diversity involves ethnicity and gender, but the benefits of diversity extend beyond these traditional aspects. Research has shown that boards with more diverse functional backgrounds are less prone to groupthink. The theory is that directors with diverse backgrounds and perspectives are better at challenging the other’s views to create robust discussions, stress-test alternatives and make better-informed decisions than those with similar backgrounds.

It’s difficult to argue against the need for more diversity on corporate boards but it could be difficult for executives and chairpersons of boards to select the most suitable candidates. Some advocacy groups offer lists of potential board members, however these candidates aren’t typically part of the chairpersons networks, or haven’t been considered for a position in top management.

Boards can begin by auditing their current member profile. They can then use their annual evaluations to get rid of members who are no longer productive and discover new talent that best reflects the future direction of the company. They can also use their networks to find trailblazers that aren’t in their uniform director pool.

https://board.international/how-to-increase-corporate-board-diversity/

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