Boardroom Diversity: Getting the Balance Right for an Effective Board
Over the years, there has been steady progress in the balance of individuals holding positions at board level in companies, with companies significantly improving the number of women over the last decade, for example increasing promotion of women to part-time non-executive director roles.
When you hear the word diversity, you may be thinking – age, ethnicity, and gender. However, it also refers to skills, backgrounds, culture, experiences, competencies, philosophies, values and beliefs. All of which provides a shift in perspective.
The benefits of having a diverse range of people fulfilling boardroom positions is becoming much clearer as we see businesses reap the rewards. However, further progress is still required to encourage a shift from it being a ‘nice to have’ (possibility) to a ‘business necessity’ (desirable), across the wider majority of businesses across the world.
So how can businesses benefit from boardroom diversity? What exact value does it bring to a company?
Here are some of the reasons so many businesses are choosing wisely when it comes to recruiting for boardroom roles:
Improved Decision Making
Could more effective decisions be made when more of those affected are involved in the decision-making process? With diversity comes a broad range of perspectives and thinking which has great value when it comes to addressing the often complex challenges requiring decisions.
The wider views increase the potential of innovative solutions, unique ideas, thus increasing possibilities of making sound strategic judgments and decisions which take into account risks and implications.
Let’s face it, we’re living in a complex and ever-changing landscape. Such times call for businesses to be smart and able to quickly adapt in the face of adversity. Would you agree that the ability to shift and flex an approach is vital for businesses to survive in such a competitive and rapidly changing world?
A diverse board can offer much-needed strength in these circumstances, enabling insightful discussions, perspectives and schools of thought for new ways forward.
When you have a group of individuals who are very similar, you’re unlikely to experience differences of opinions as they’ll likely be fairly agreeable. Whilst this sounds very pleasant and nice, what is lacking is the power of discussion! When there are difference of opinions and questions being asked, it gets others thinking and feeling differently. It’s a great way to shift perspective and see situations from a different angle. This type of healthy debate can lead to creative and dynamic ways forward which closer represent reality. Often the best ideas are formed in this way.
As businesses exist in service of something, wouldn’t it be ideal to be able to create solutions and decisions that are in line what your customer’s needs? Whoever they are, it’s likely they’re diverse in some way, shape or form and being able to match that perception with your own board can provide a more aligned and realistic assessment of what it is they actually want, need or require.
This only strengthens a company’s knowledge about its audience and in this day and age, this kind of knowledge can be extremely powerful.
Problems are commonplace in the business world, most of our time is spent assessing and solving problems.
When problems are presented to a wide variety of people, what do you get? The same solution? Or, something slightly different from some if not all of them?
By putting together a diverse group and both allowing and encouraging healthy discussions and debates, you will inevitably end up with ideas and ways forward that might look very different if the group was more homogenous.
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