BY: Lisa Nichols
Evidence consistently shows that more diverse boards lead to better results – from higher profits and improved shareholder relations to more effective decision making and stronger governance.
Companies’ performance increases when their board members reflect different backgrounds and experiences. The more diversity is represented, the stronger a board becomes. Companies that want to increase their profitability and their shareholder value should prioritize diversifying their boards, not only in terms of gender and ethnicity, but also in terms of age, background, and expertise.
“The value of having multiple voices on the board is in ensuring that each voice is heard and considered.”
Board members with experience in different roles or sectors bring an external point of view that helps inform decisions and mitigate risks. Boards that resist including people from a variety of backgrounds, cultures, and experiences miss out on the knowledge and insight that they bring
Diversity alone isn’t enough, however. In order for boards to truly strengthen their effectiveness, there also needs to be a commitment to building equity. The value of having multiple voices on the board is in ensuring that each voice is heard and considered. For many boards, the challenge is that the loudest voices or those with the longest tenure often dominate discussions, preventing newer members from contributing their thoughts. Promoting an equitable board culture takes intentionality and effort. It takes leaders who seek the thoughts and perspectives of each board member, facilitating decisions that take into account the value diversity offers.
Equity means valuing the expertise, backgrounds, and contributions of each board member equally. It leads to directly asking questions to multiple board members to get a broader perspective, rather than listening only to the voices that are the most dominant. It encourages members to push back, ask questions, and suggest other ideas, rather than pressuring the group to accept the narrative promoted by a few.
When a board embraces equity, it creates a collaborative environment where each member is able to contribute their unique insight, and that yields financial, relational, and strategic results.
Lisa Nichols is a Team Connection and Talent Development Partner who helps leaders create environments that encourage each team member to thrive. She loves connecting with amazing women and inspiring people to advocate for themselves and others.
