I do quite a bit of work on matters of board composition, selection, and succession, and what I can tell you is this; board diversity is simply smart business.
You’ll never hear me recommend diversity solely for the sake of checking a box, but when diversity in the boardroom offers so many benefits to the CEO (and to the entire organization) it’s nothing short of irresponsible for chief executives not to place their board composition under the microscope. In today’s column, I’ll share with you the top 10 reasons why diversity is good for the boardroom.
Over the years I have witnessed just about everything when it comes to the variety of agendas, motivations, and expectations that come into play when building a board – they may often be well-intentioned, but they’re not all healthy. I have come to the conclusion that many CEOs and nominating committees simply focus on the wrong things for the wrong reasons when it comes to board composition – specifically when it comes to the topic of diversity.
It’s not uncommon for a CEO’s first instinct to be to create a board that looks good to the public, and that also carries some cachet with important constituencies – laudable goals but not necessarily lofty ones. Looking good and being good are not always one and the same. There are also some CEOs who would view the perfect board as one that’s easy to manage, a board that’s compliant, and one that doesn’t push back. A board’s purpose is to govern not comply. A good board listens, contributes, challenges, and when necessary pushes back.
In my experience, I’ve found that the best boards are also the most diverse boards. They can offer a depth and breadth of insight, perspective, and experience to CEOs that non-diverse boards simply cannot. When I mention diversity, I’m addressing more than age, ethnic, and gender diversity, but also diversity is skills, competencies, philosophies, and life experiences as well.
I wanted to get very specific about the value of diversity in the boardroom, so I polled some of my colleagues for their opinions on the subject and synthesized their response in the 10 bullets below:
- It reflects the real world – something every company should be sensitive to.
- Healthy debate can lead to better decisions.
- Divergent backgrounds mean tackling the same idea in differing ways.
- Great ideas come from the disruption of the status quo.
- Your clients and customers are diverse.
- This can make your company knowledgeable and sensitive to a wider variety of groups.
- Counsel from a variety of authorities is sensible.
- Setting an example at the top will hopefully have a trickle-down effect within the organization.
- Improved reputation and brand.
- A variety of backgrounds can make the company more adaptable to its ever-changing environment.
Wouldn’t it be nice to be respected and admired as a CEO who values the benefits of diversity rather than a CEO criticized for their board’s lack thereof? What are your thoughts?
