The Top 3 Reasons Why Goldman Sachs is Right in saying Diversity in the Boardroom Matters for Performance
“Goldman Sachs CEO David Solomon said on Thursday that the bank would refuse to take a company public unless it had at least one ‘diverse’ board member. … Diversity in the boardroom matters for performance” – Fortune
We’re encouraged and appreciate seeing Goldman Sachs share our long held view that diversity in the boardroom matters for performance. We are the leader in identifying, recruiting, developing, and onboarding more diverse executive talent for senior-level appointments in the C-suite and boardroom, ensuring long-term success for our corporate and nonprofit clients as well as the candidates whose careers we champion. To quickly touch on the top 3 reasons Goldman Sachs is right:
1. Invaluable diverse perspectives is a core reason why diversity in the boardroom matters for performance. We have long known that homogeneity breeds ‘groupthink’, thwarts innovation and reduces the quality of decision-making. What is becoming increasingly clear is that diverse perspectives and experiences improve an organization’s insights into areas that are critical to the development of strategy, markets and risks. Progressive companies began improving board diversity because they felt it was the right thing to do. Many have since reported a heightened focus on innovation, improved financial results, enhanced corporate reputation, all making it clear that diversity in the boardroom matters for performance.
2. Stakeholder trust and reputation. When we think of brands with outstanding reputations, they have often earned the trust of a broad spectrum of constituencies. Their shareholders, employees, customers, and business partners, as well as the communities in which they operate, all feel that the company understands and respects them. One way a company builds trust is by making sure that the C-suite and the board are a fair representation of its stakeholders, and that key constituencies can see themselves reflected back in the leadership of the company. This “trust”, forged between all involved parties is; 1) critical in overcoming the inevitable “rough patches” and missteps businesses occasionally endure and; 2) clear evidence diversity in the boardroom matters for performance.
3. A competitive advantage. A range of perspectives is critical for a board to help the C-Suite and management anticipate emerging risks and implement strategic pivots. Companies that can mitigate risks and effectively pivot – can optimize performance. Moreover, trusted companies that have demonstrated their commitment to diversity and inclusion at all levels of the organization are often able to attract and retain top talent better than peers. The value of diversity on a company’s performance has been validated by think-tanks like Catalyst and the Peterson Institute as well as also from companies like Credit Suisse, McKinsey, Catalyst and Deloitte all reaching the same conclusion that diversity in the boardroom matters for performance.
Search is the foundation of our business and frequently marks the beginning of our relationship with our clients. Our cutting edge technology, robust database, and vast network provide a strong launching point and unparalleled experience for clients seeking diversity throughout all levels of their organization. Reach us if you would like to have a more comprehensive conversation on how we can serve you.