During my recent coffee meetings and International Women’s Day events, there has been considerable discussion around the recognition of the need for more diversity around the board table. While gender is one of the areas of diversity, particularly here in Asia there is a growing call for diversity of age, background and skills as well.
Everyone knows that a greater diversity of directors is likely to lead to less risk of “groupthink”. Evidence is regularly quoted that greater diversity leads to improved company results, improved risk assessment, greater creativity and innovation. And yet, while change is happening, it is often seen to be happening at a very slow pace.

In my consulting practice, I have come to recognise that when decisions are made, facts and evidence can often be overridden by emotional or psychological factors. When we look at why certain decisions were made, we are not be able to see what was in someone’s head, but we if we look hard enough at their behaviour, it can give us an indication of what they might have been thinking. Applying this technique to the boards that are slow to bring more diversity to their members, I have come to wonder whether fear and defensiveness may be factors.

New directors who are different will bring different perspectives. There is a good chance they will ask questions that may not have been asked before or raise issues that may not have been considered before. This is where the benefits arise. However, asking questions about the past may make the directors who have been sitting around the table feel vulnerable or defensive. They may believe they should have considered these things and didn’t. However, one’s own perspectives are informed by one’s own experiences and knowledge – no individual can think of everything.   In terms of the past, hindsight is a gift. It makes things clearer for all and directors need to ask themselves whether they did the best they could at the time with the information they had.

Directors of a board are there to serve the best interests of the company and its shareholders. The best way to serve shareholders is to seek to continuously improve. Shareholders are not going to mark a company down for changing course as a result of new perspectives raised or different questions asked around the board table. If new directors have brought a fresh way of thinking that drives a better way, shareholders will value this. They are going to worry less about the past if broader perspectives are considered in the present and future. Conversely, shareholders are not going to believe their interests are being served if a board isn’t prepared to adapt to new environments, to change and to embrace the possibilities of new perspectives.

Rather than taking a defensive mindset, directors on boards who are grappling with task of becoming more diverse should consider the benefits for themselves as well – given that self-interest is often a great motivator. A new director who looks at things differently and asks questions from a different angle may assist existing directors to broaden their own perspectives, allowing them to take these new views and apply them elsewhere. No better example of this could be the Male Champions of Change, many of whom are quick to say they did not see the benefits of diversity in their own businesses until they were engaged in the program and put greater diversity into practice in their own companies.

Ultimately, bringing in new directors who vary from the existing group of directors through gender, race, skills, industry or experience should benefit not only the company they serve, but the shareholders of the company and the directors themselves. Perhaps this perspective can help quicken the pace of change.

Coffee count: 408