We find ourselves in a state of disruption. Life as we know it is in constant flux and nothing is normal. For boardrooms to respond adequately, diversity – in skills, background and thought – is paramount.
There is no doubt that diversity gives companies the edge. Global institute McKinsey & Company has been examining diversity for several years and its research confirms that companies with greater gender and ethnic diversity in their management teams and boards performed better financially.
According to the 2018 McKinsey & Company insights, when companies invest in diversity and inclusion, they are in a better position to create more adaptive, effective teams and more likely to recognise diversity as a competitive advantage.
When a board is diverse and the fit is right, the benefits can be palpable. Research indicates that the lack of diversity is becoming a sticking point for boards in the US.
This may be nothing new, of course, but the matter is growing increasingly pressing, as evidenced recently when the governor of California signed a law requiring public companies with HQ’s based in that state to appoint directors from minority groups. It’s clear there is a sense of urgency when it comes to racial diversity on corporate boards.
To fish off the company pier… or not?
In today’s global world where there is a rapid demographic shift in the work- and marketplace, it’s hard to conceive that a non-diverse workforce can serve the best interest of the company and its shareholders.
So why has underrepresentation of certain groups persisted? Simply put, there is fear of the unknown, hence boards stick to what – and whom– they know.
Where there is legislative imperative behind the case for diversity, change does happen, if rather slowly. Quotas, though controversial, have had an impact on increasing board diversity, particularly in Southern Africa.