Board Diversity has become more of a www.affordableboard.com/4-key-components-of-a-successful-strategic-plan/ topic due to significant changes in society and worldwide activism. Many companies have responded by increasing the number of minority and female directors. However, some companies are stepping beyond gender and racial diversity, making sure that they have cognitive diversity (the range of skills experience, perspectives and experiences on issues that could improve decision-making).
A diverse board is more efficient than one that is homogeneous. Boards with diverse backgrounds and abilities are able to solve complex problems in a different way and avoid the groupthink that limits thinking.
This is why many activists and investors want to see more diverse and intelligent boards. A board with diverse perspectives, experiences and viewpoints will help the company respond faster to major changes in the world, including the rapid expansion of ESG issues.
Diverse boards are more likely to be cognitively diverse. This allows them to identify problems faster and more effectively. When employees are able confront each other, they are able to better tackle the issues.
Having a diverse board isn’t a panacea however. Boards need to be able to collaborate despite their differences. This requires the chair to know how to conduct productive discussions and promote collaboration among people with different worldviews and attitudes. If not, it could result in the loss of productivity.