Corporate Board Diversity
To address the challenges faced by companies in the face of competition, it is vital to have a board of directors who can identify and address complex issues and opportunities. This requires a broad spectrum of perspectives. In addition to racial and gender diversity, boards should comprise people who have worked in a variety sectors and possess different skills backgrounds, knowledge, and perspectives.
Despite the substantial increase in diversity of the boardroom It is clear that companies have a lot of work to do. Spencer Stuart reports that women and directors of minority ethnic or racial groups comprise less than one quarter of board seats in Fortune 500 companies. Similarly, women and people of color are not represented in senior leadership positions.
Investors and consumers are increasingly calling for more diversity in boards and executive suites since corporate governance is an issue of great interest. Increasingly, they are demanding detailed reports on these metrics, and a lot of them are voting with their money by pressing corporations board.international to increase diversity on their boards.
Some states have passed legislation to promote diversity on boards. They can be controversial and can create the impression that non-white and women directors are picked as “token selections” rather than on their merits. They can make it more difficult to find qualified candidates when they are based upon the achievement of a certain number. In many instances it is the case that focusing solely on diversity could result in boards that are not effective and not focused.