Corporate Board Diversity
As companies are faced with new challenges, it is more important to have a board that can be able to identify and respond to complexities and opportunities by tapping into a broad range of perspectives. Boards should be diverse in terms of gender and race and include individuals who have a range of skills, backgrounds knowledge, perspectives, and expertise.
Despite the impressive gains in boardroom diversity, it is clear that there is still a lot of work to be done. Spencer Stuart reports that women and directors of underrepresented ethnic or racial groups represent less than one quarter of board seats in Fortune 500 companies. Equally, women and those of color aren’t represented in senior leadership positions.
With the spotlight on corporate governance, investors and consumers are calling for more and better diversity in executive and boardrooms. Increasingly, they are soliciting detailed reports on these indicators, and many are voting with their dollars by pressing companies to promote more diverse boards.
Certain states have passed legislation to encourage diversity on boards. The concept of quotas can be controversial and can create the impression that non-white and women directors are picked as “token selections” rather than based on their merits. Furthermore, they can make it harder to find qualified candidates especially if the focus is on achieving the target numbers. In many cases, focusing solely on diversity can result in boards that are unfocused and ineffective.
https://board.international/how-to-increase-corporate-board-diversity/
