Back in the old days, choosing board members was simple. The CEO would simply pull in like-minded people from his (and it usually was a he) existing network of trusted colleagues.
It seemed obvious at the time that it is better to have similar people sat around the board table than a disparate bunch that might disagree and bring in different viewpoints. However, there are significant downsides to this arrangement.
Today’s businesses are more complex than before, with diverse workforces and diverse customer-bases – and a homogeneous board is simply incompatible with this modern, multifaceted work environment. For a board to maximise the full potential of every element of a business, it must broaden its composition to become as diverse as its workforce and its customers.
A truly diverse board encompasses talent from a range of skills, beliefs and life experiences as well as different genders, ages and ethnicities. Of course, diversity for its own sake is of little value. Board members must also be competent and capable individuals with a commitment to the success of the business.
Five reasons why a diverse board is good for business
- If ‘know your customers’ is the first rule of business, having a board that reflects the composition of your target market is fundamental to gaining that essential insight.
- When little or no debate exists between board members, policy-making stagnates. Diversity, however, encourages healthy debate, fresh thinking and, ultimately, better decisions
- Business is a brutal game of survival of the fittest. It is not necessarily the biggest and strongest that survive, it is the most adaptable. A board comprising various types of people with different backgrounds gives a company the all-round attributes it needs to evolve and survive in an ever-changing commercial environment.
- A diverse board sets an example which other parts of the company can follow. Every aspect of a business can benefit from diversity. It helps build a more dynamic workplace and instils a culture of innovation throughout the organisation.
- Nowadays more than ever before, the reputation and ethical perception of a brand is crucial to its success. A diverse board, therefore, is something for a company to promote. It’s mere existence will bring about kudos and competitive advantage.
Unleash the benefits of diversity
While media interest in the composition of company boards is relatively recent, research has indicated for a long time that diverse boards are not only a moral obligation, they are an essential business enabler.
Boards comprising people with an appropriate mix of skills and backgrounds perform better than those lacking diversity. With a mix of different people on their board, companies will grow in different markets, find different solutions to familiar challenges and optimise the potential of different aspects of the workforce.
So, if the upper echelons of your business are looking decidedly samey, maybe it’s time to embrace diversity and for everybody to get on board!