Board Diversity is a subject that has come to greater focus due to major shifts in society and global activism. Many companies have responded by increasing the number female and minority directors. Some companies go beyond race and gender diversity to ensure cognitive diversity.
A diverse board is more effective than one that is homogeneous. Boards with different backgrounds and skills can solve complex problems in a new approach and avoid the groupthink that limits thinking.
Many activists and investors are looking for more diverse boards. A board with diverse perspectives, experiences, and viewpoints can assist them in responding to major changes in society more quickly and efficiently such as the rapid growth of environmental, social and governance (ESG) issues.
Diverse boards are more diverse in their thinking. This enables them to spot issues faster and more efficiently. If employees are able contest one another, they will be able to better address these issues.
A diverse board isn’t a panacea. Boards must be able to work together despite their differences. This requires a chair who understands how to encourage productive discussions and teamwork among people with very diverse attitudes and worldviews. Otherwise it could lead to internal conflict and a decline in productivity.