6 Benefits of Board Diversity
posted Feb 15, 2019 by Guest post from KLR Executive Search, Edward Blum in the Business Blog
Behind a successful company is a dedicated Board. Boards help companies recruit top talent, monitor risk, implement succession planning, and more. What exactly makes a board effective? Diversity! The best corporate boards have people with wide varieties of skills and experience levels, from all walks of life. Learn more.
What is board diversity?
A diverse board is one that includes women, people of color and different ethnic backgrounds, as well as a mix of older and younger people, too.
Benefits of having a diverse board
When you build a diverse board, you bring in new ways of thinking, insights and different perspectives on consumer wants and needs.
In addition, companies with more diverse boards:
- Are less prone to take risks and more likely to pay higher dividends to stockholders.
- Are more adaptable to the company’s changing environment
- Are able to challenge conventional wisdom and innovate
- Have multiple views on the outcome of any action (hence the board is more likely to take into account a variety of risks)
- Can more easily keep up with market trends and internal problems
- Can improve their reputation and brand.
Recruiting a board of directors…Some tips for you
Every company’s nominating committee should:
- Require diversity as part of the recruitment process
- Compile a set of competencies and insights that the board is seeking
- Review current board members to identify any gaps and confirm that a wide range of perspectives is represented.
- Not focus so much on recruiting C suite level people—there are minority groups who have valuable expertise and perspectives to add to your board.
- Cultivate a board that encourages open, honest, individual feedback
A commitment to diversity depends on sustained action within your organization as a whole, and might not be a quick fix but rather an ongoing process. However, if you work towards pushing your organization into innovative directions little by little, you will undoubtedly bolster success in 2018 and beyond. Do you need help recruiting board members and establishing a more diverse environment? Reach out to any member of KLR Executive Search Group, LLC.