Board Decision Making and Diversity

Philadelphia partner Doug Raymond contributed a piece for Directors & Boards titled “Board Decision Making and Diversity,” in which he discusses the critical juncture at which boards find themselves. With an obligation to duty of care under corporate law, boards must consider all angles of their decision-making – and, as Doug writes, that kind of 360-degree perspective tends to follow when corporations have greater diversity in the boardroom.

“Where there is real diversity in the boardroom, there is a greater likelihood that the deliberations of the directors will include the evaluation of potential alternatives that either would not occur to a more homogeneous group, or that would be misunderstood or underappreciated and therefore too quickly dismissed. If these varying experiences and points of view are shared collaboratively and respectfully, all of the directors are better equipped to address the issues with which they are presented.”

Still, Doug cautions that while other countries have taken to instituting statutory quota requirements – for gender representation, for example – it would be a misstep to rely on a single criterion for board members. Instead, he calls for a more global view of prospective members, taking into account their experience, integrity and other qualifications in addition to their background. Following this approach, corporations can convene more meaningfully diverse boards.