Corporate Board Diversity

Corporate Board Diversity is the term used to describe a broad variety of demographic characteristics that are ables and attributes in the boardroom. This could include gender, age and educational background qualifications, professional experience and philosophies, as well as cultural identity such as race, sexual orientation and religion. This diversity could help develop an range of perspectives and abilities to meet the current and future demands of the business.

A successful business requires a board that is capable of doing its job. Therefore the composition look at this now of the board must be designed to meet this objective. Diversity is an effective way for the board to accomplish this goal. It promotes different leadership mental, thinking, and emotional styles that support the understanding of the risks.

Investors are increasingly demanding that boards of directors be diverse. In fact, several large institutional investment management firms are now actively voting against the board members of companies that do not meet their requirements for gender and racial diversity. CalPERS, the state pension fund workers has sent letters in August 2017 to 504 companies that are listed on Russell 3000, demanding that they develop and implement a plan to promote diversity.

Some states also enact regulations that force companies to adopt measures to ensure board diversity. California, for example, requires that public companies with their headquarters in the state must have at least a certain number female directors and directors from underrepresented minorities on their boards by the year 2021. Companies are also required by law to disclose the diversity of their board members, including ethnic and racial. of their board.

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