Corporate Board Diversity

Corporate Board Diversity is an expression used to describe the wide range of demographic attributes, characteristics and abilities within the boardroom. This can refer to gender, age, educational background, professional skills and experience, philosophies, cultural identity, race and sexual orientation, as https://board.international/how-to-transition-to-paperless-board-meetings/ well as religion. This diversity will provide an array of perspectives and abilities that meet the needs of the business and future of the company.

A successful company needs a board that is capable of delivering well. Therefore the composition of the board must be designed to accomplish this objective. Diversity is a method for the board to reach this goal. It encourages different leadership, thinking, and emotional styles that help the understanding of the risks.

As a result, investors are increasingly demanding that their companies have an inclusive board. Some of the biggest institutional investment companies are actively deciding against board members who don’t conform to their standards of gender and racial equity. CalPERS, the state pension fund workers, sent letters in August 2017 to 504 companies listed on Russell 3000, demanding that they come up with and implement a policy for diversity.

Additionally, certain states are passing laws that require companies to implement measures to ensure board diversity. California, for example, requires that public companies that are headquartered in the state must have at least a certain percentage of female directors and directors from minority groups that are underrepresented on their boards by the year 2021. Companies are also required by law to disclose the diversity of their board members, including ethnic and racial. of their board.