Corporate Board Diversity is a term used to describe the broad diversity of demographic attributes, characteristics and abilities within a boardroom. This could include gender, age, educational background as well as professional experience, competencies as well as philosophies, cultural identities and sexual orientation, race and religion. This diversity can cultivate an array of perspectives and skills that can meet the needs of the business and future requirements of the company.

A well-performing board is crucial for a successful business This is the reason why the composition of a board should be designed to achieve this objective. Diversity is one way the board can accomplish this goal by encouraging different ideas, perspectives and leadership styles that support a greater awareness of risk.

Investors are now increasingly insisting that boards of directors be diverse. Some of the largest institutional investment firms are actively voting against board members look at this now who do not meet their standards for gender and racial equity. For instance, in August 2017, CalPERS, a pension fund for state employees, sent letters to 504 companies on the Russell 3000 index and demanded the creation of a policy and implementation plan to achieve diversity.

Additionally, certain states are enacting regulations that compel companies to take measures to achieve board diversity. California for instance requires that public companies with their headquarters in the state have at least a certain amount of female directors and directors from underrepresented minorities on their boards by 2021. Companies are also required by law to disclose the diversity of their board members, including ethnic and racial. of their board.