The need for boardroom diversity is well-established. Many European countries have mandated that at least 40% of directors of publicly listed companies must be women, and similar laws have been passed in several U.S. states establishing gender- or race-based quotas. And to be sure, these policies have led to substantial progress: For example, one report found that representation of women on FTSE boards has grown eightfold in the last 25 years, from 5% up to 40%. But is simply changing the composition of boards enough to ensure that diverse perspectives are actually integrated into decision making?
Is Your Board Inclusive — or Just Diverse?
In recent years, many boards have made substantial progress when it comes to increasing diversity. But the authors’ research suggests that simply increasing representation of women or ethnic minorities isn’t necessarily enough to achieve true inclusion in the boardroom. Through an analysis of director diversity and financial performance of the FTSE 350 as well as a series of in-depth interviews with global board members, the authors identify common benefits and challenges associated with moving beyond representation on the board. They then offer several research-backed strategies to help boards become not just diverse but truly inclusive, including adopting an intersectional approach, challenging assumptions around status and experience, and proactively investing in board culture.