The New Diversity Approaches Corporations require
The board of directors is a fundamental component of corporate governance, serving as the voice of shareholders in overseeing executive leadership. The directors’ service on behalf of shareholders is critical due to the wide disbursement of stock in public corporations. Board independence, size, and composition (including diversity among its members) are essential aspects when examining whether or not the Board is effectively meeting its responsibilities. It can be argued that the composition of the board of directors is core to its effectiveness as addressing strategic complexities requires diverse talent and perspectives.
The benefits of having a socially and professionally diverse board cannot be realized without an egalitarian board culture. Boards that want to maximize their effectiveness need to do more to ensure that different perspectives are regularly elicited and integrated into the board’s work. Discussions about the diversity in boards of directors often focus on gender and ethnicity, as well as independence from the firm’s internal pressures. The thrust of the argument in favor of a diverse board is to go beyond selection based upon a prospective members’ fit into one of these categories. Productive board discussions require a breadth of perspective that by definition are supported by diverse composition.
