Numerous studies have shown that diversity has a positive impact on board performance. Diverse individuals can bring different perspectives as well as experiences and angles of thinking to a problem. This could lead to solutions that are otherwise missed by an homogenous board. This is especially relevant for boards that comprise members from underrepresented groups. They will have insights into the preferences and culture of these groups that can help them better serve those groups as clients.

Moreover, the presence of diverse backgrounds and experiences within a board can increase confidence and morale. When board members feel their views and opinions are heard they are more committed to the success the company. It is important to track your board’s progress on promoting diversity, and identify any obstacles.

Another area where diversity could contribute to reducing risk. A recent study by Berger et al. The study concluded that greater gender diversity and age diversity on the board led to better risk management and a reduced risk of exposure to market risks. The same study also shows, however, that having a high level of diversity on the board may cause issues with cohesion and communication.

Finally, boards with diverse composition are more aware of the particular challenges faced by those from underrepresented communities, which could prompt them to take action to encourage ethical and social responsibility within their organizations. This is why it is crucial to continue to find and find talented women or people of color and LGBTQ candidates for board positions.