Corporate Board Diversity Best Practices

Corporate Board Diversity

As the demand for investors and other market participants for more diversity in the boardroom, boards need to be able to establish a clear strategy for meeting those expectations. The strategy should consider not just the demographic elements of race and gender but also broad categories like national origin; the cultural and religious background of the person; and those with disabilities.

The current state of boardroom diversity is a major issue however, it is important to recognize that there are a number of areas where improvements have been made. We believe that boards should share their opinions, reveal their diversity composition, and go beyond the typical candidate pool in their search for candidates who are diverse.

In the boardroom, the variety of perspectives on issues that affect the company is crucial to effective governance. However many boards struggle with the reality that their diversity is restricted by their membership. It is because a large portion of current directors are looking for new members in their networks. These networks may be made up of those who are very similar to them, which reduces the pool of diverse candidates. The trick is to break this cycle, so that the board can make different appointments, as they will have a positive effect on the company, and not just to satisfy the quota. We’ve put together some of the best practices to increase boardroom diversity.

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