Diverse Board, Healthy Business
In a Reuters blog, Marcus Venture Consulting CEO Lucy P. Marcus discusses how companies like Facebook (which has a small board with no women) need to consider more diversity if they want to remain healthy businesses. Although Marcus feels that women in particular are significantly underrepresented, she points out that the lack of gender balance reflects a larger diversity problem. Too many boards are populated with people similar in age, color, background, international experience, and thought.
We do not need diversity for diversity’s sake, but because diversity on the board contributes to the profitability of the business. — Lucy Marcus
THE ADVANTAGES OF A DIVERSE BOARD
Businesses with diverse leadership are better businesses because …
- They better reflect all of their stakeholders and their business environment
- They can utilize different perspectives to create more successful business strategies
- They are more in touch with investor expectations, staff needs, and customer demands
- They are better equipped to withstand changes in their business environment
- They are better able to keep up with what is happening in the outside world
Though some are afraid that diverse opinions and independent thought will make it hard for the board to function cohesively, Lucy Marcus insists that the board of today demands open and dynamic discussion in order to better serve the business.
When I see a business with a board that has a preponderance of people with similar, if not identical, profiles, this is a signal that it is not a healthy business built for the long term.— Lucy Marcus
Diversity is not enough, though. For the best corporate governnance, there should also be regular turnover in the boardroom, ensuring that new voices are always being heard.
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