The advantages of diversity on boards are now well-documented, and efforts to create more representation of site here minorities and gender in boardrooms are beginning to pay off. The impact of diversity on performance is not fully understood.
An argument that is often cited is that a board with a greater diversity of genders and ages will have a wider knowledge base. This information would not be available to a group of men and women who are the same. A board that is more diverse is expected to be more “cognitive” and will be able to consider many options when it comes to how to move a company forward.
But there are other factors at play. People who are considered to be minorities or tokens of groups could self-censor, and avoid expressing beliefs and opinions which are in opposition to the majority. The board might not be able to fully take advantage of its cognitive diversity.
Furthermore, even though academic research indicates that demographic diversity could influence board decisions, it also indicates that this isn’t the only thing that matters. Other aspects, like the independence of board members and their educational qualifications, measured by the number of years of college that go beyond a bachelor’s can significantly impact performance.
To get new members, companies should be creative when searching for them. For instance, they could consider reaching out at business schools and universities to identify potential candidates. They may also consider forming task forces that are charged to look into areas where best candidates may not be visible. This approach is a far more effective method of increasing the diversity in the boardroom than using external or internal consultants to suggest names.
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