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Corporate Board Diversity
Corporate Board Diversity refers to the mix of people that make up a company’s board. A diverse board will provide a range of perspectives and insights that help it make better decisions. It can also improve a business’s adaptability to change, and improve its reputation as an employer.
A diverse board can be more effective than a board that is homogeneous according to research. It helps to prevent groupthink since different people are able to challenge ideas and offer new perspectives that might not have previously been considered. This can lead to a more robust debate and discussion which will lead to better outcomes and more effective decisions for the business.
Board diversity can strengthen the social contract between a company’s stakeholders and the company itself. It is achieved by encouraging discussion and debate. By reflecting the diversity of society companies can demonstrate to its investors and customers that it understands them which builds trust.
It is possible that a diverse board will have a better understanding of its customers and what they require and requirements, which can result in more innovative products and services. This is particularly relevant in the industries that are geared towards customers like banking and retail.
A diverse board of directors can bring new skills and expertise to the table, which is especially valuable for technology companies. It is advantageous to have someone who has experience in sustainability or cyber security. A diverse board can be more responsive to cultural shifts and changes in society such as an increased awareness of environmental and social issues.
