The impact of Board Diversity
Despite increasing the importance of diversity on corporate boards, there is still a small number of female and non-white directors on the top public company boards. However, that is changing and more directors from minority groups are making their way onto company boards.
A diverse board can be more creative.
A diverse group of directors can be a potent driver of innovation in the boardroom. It can encourage everyone to be more innovative and open-minded, leading to higher employee satisfaction and improved performance.
Boards that are more diverse also have access to a larger network of industry and business connections that can help them identify new opportunities. They also have a better understanding of the needs of their customers and potential customers, which can help them to solve more strategic problems.
In addition they are more likely to see the benefits in investing in minority shareholders.
More diverse directors also tend to be more sensitive to sexual harassment and other workplace issues.
This can have a positive effect on the reputation and culture of the company which makes it more welcoming for employees.
Additionally, they are more likely to be able to incorporate their knowledge gained from their professional experience into the company’s strategy and operations.
They can aid companies in becoming more relevant and create an impact on the world. This can lead to an increase of the share price of the company.