Corporate Board Diversity Best Practices

Corporate Board Diversity

As demand increases from investors and other market participants for more diversity in the boardroom, boards should have a clear plan of action for meeting those expectations. This strategy should not just comprise the demographic elements of gender and ethnicity but also broad categories like religion, nationality, cultural and religious background, as well as those with disabilities.

It is important to point out however that there have been some positive developments in the current situation of boardroom diversification. As a start, we believe it is essential for boards to publish their opinions regarding the issue, provide the diversity composition of their boards, and consider looking beyond the traditional pool of candidates in their search for diverse candidates.

In the boardroom, the variety of perspectives on the issues that affect the company are essential to effective governance. Many boards struggle to deal with the fact that their own membership limit their diversity. It is because many serving directors are looking for new members in their networks. These networks could be comprised of those who are very similar to them, which reduces the pool of diverse candidates. The problem is to find a way to break the cycle to allow the board to make diverse appointments, not just to fulfill quotas, but because those appointments will have a positive impact on the company. To assist in this endeavor we’ve put together an extensive list of best practices for increasing boardroom diversity.