The benefits of diversity on boards are well-documented and efforts to achieve greater representation of women and minorities in boardrooms have begun to pay off. The impact of diversity on performance is not fully understood.

One of the most common arguments is that a greater diversity of demographics can increase the knowledge base of a board and provides it with information that would be missing from a homogeneous set of men or women. In other words an organization with more diversity is likely to have more “cognitive variety” and consider different options when deciding www.boardroomsales.com/evolution-of-corporate-governance/ on how to move the business forward than one with less diversity.

However, there are other factors to consider. People who are viewed as minorities or tokens in a group may self-censor or refrain from expressing opinions and beliefs that contradict the majority. As a result, the board may not be able full advantage of the intellectual diversity it has included in its composition.

Additionally, although research in the field of academia suggests that demographic diversity can have a positive effect on board decisions, research suggests that it isn’t the only factor that matters. Other characteristics, such as board independence and educational qualifications, measured by amount of years of education that go beyond a bachelor’s degree can also have a significant effect on the performance.

Companies looking to improve their boardroom composition need to be innovative in their search for new members. Companies could, for instance think about reaching out to universities and business programs to find potential candidates. They may also consider forming task teams that are tasked with identifying areas where right candidates might not be visible. This is a more effective method of increasing diversity than relying on consultants, whether internal or external.