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The Impact of Board Diversity on Corporate Performance

Artículo realizado por profesionales del sector cosmético

The benefits of diversity on boards are well-documented and efforts to achieve greater gender and minority representation in boardrooms are starting to pay off. The impact of diversity on performance is still largely unexplored.

A common argument is that greater diversity in the population can increase the knowledge base of a board and provides it with information that isn’t available to an homogenous group of men or women. In the same way an organization that is diverse is expected to have more “cognitive variety” and explore more options for deciding which direction to take the business forward than a less-diverse one.

But there are other factors that are at play. People who are considered minorities or tokens in groups may self-censor, and avoid speaking out about beliefs and opinions that do not align with https://boardroomsales.com/ the majority. As a result, the board might not be able take full advantage of the intellectual diversity it has incorporated into its composition.

Additionally, although research in the field of academia suggests that demographic diversity has a positive impact on board decisions, research indicates that it is not the only factor that is important. Other aspects, like the independence of board members and their educational qualifications, measured by the amount of years of education that are beyond a bachelor’s level, can significantly impact performance.

To attract new members, businesses should be innovative in their search for them. Companies should, for example think about reaching out to universities and business programs to identify potential candidates. They may also consider forming task forces charged with investigating areas where best candidates may not be obvious. This is a more effective approach to increasing diversity instead of relying only on consultants who are either external or internal.

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