Board Diversity is a matter that has come into more attention due to significant shifts in society and global activism. Many companies have responded to this by increasing the number female and minority directors. However, some companies are going beyond the limits of racial and gender diversity by assuring cognitive diversity (the broad range of abilities and perspectives, experiences and issues that can improve decision-making).
A diverse board can be more effective than a homogeneous one. Boards with different backgrounds and expertise can tackle complex problems in a new way and avoid the groupthink that limits thinking.
Many activists and investors are searching for boards that are more diverse. Boards with different perspectives, experiences, and perspectives can help them respond to major changes in the world of society more efficiently and effectively – for example, the rapid growth of environmental Governance, Social and Governance (ESG) issues.
Boards with diverse backgrounds are more likely to have cognitively diverse boards. This means they can spot problems in their business quickly and more effectively. It is easier to solve these issues when a array of perspectives are available and when employees challenge each other and ask tough questions.
Having a diverse board does not guarantee success However, it is a good thing. Boards need to be able work together regardless of their differences. This requires a chair that knows how to encourage productive discussions and teamwork among individuals with a variety of attitudes and worldviews. If not, it can result in conflict and an inability to work.