Corporate Board Diversity

To address the challenges faced by companies it is crucial to have a board of directors who can recognize and address complex issues and opportunities. This requires a wide range of perspectives. In addition to racial and gender diversity, boards must include people who are experienced across a variety of industry sectors, and who have diverse skills backgrounds, knowledge, and perspectives.

Despite the huge gains made in the diversity of boardrooms It is clear that there is still much work to be accomplished. Spencer Stuart reports that women and directors from underrepresented ethnic or racial communities make up less than a quarter of board seats in Fortune 500 companies. Similar to this, women and individuals of color are underrepresented in senior leadership roles.

With the spotlight on corporate governance, consumers and investors are urging for greater and more diverse executive and boardrooms. More often, they’re demanding detailed reports on these measures, and a large number are voting with their money by pushing corporations to increase diversity on their boards.

Certain states have enacted laws to encourage diversity on boards. But quotas are controversial, and they can lead to the perception that women and non-white directors are chosen as “token” selections, rather than for their merits. Furthermore, they can make it more difficult to find qualified candidates especially if the emphasis is on achieving the target numbers. In many cases the focus on diversity alone can result in boards that are unproductive and unfocused.

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