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Why Diversity Can Backfire On Company Boards
Too often, it can lead to personal battles and inhibited discussions. Heres how to make it work.
By JEAN-FRAN?OIS MANZONI,PAUL STREBEL And JEAN-LOUIS BARSOUX
Wall Street Journal, January 25, 2009
When it comes to corporate boards and diversity, the conventional wisdom is simple: Diversity is good. When directors are too alike, the thinking goes, they look at problems—and solutions—the same way. Theres no one to challenge prevailing ideas, or to speak out on issues important to certain groups of customers and employees.
By contrast, diversity leads to more innovation, more outside-the-box thinking and better governance.
Sounds great. And it is, in theory. Unfortunately, few boards that pursue diversity ever see the wished-for returns. Many report no significant change in their performance, while others bog down in conflict and gridlock.
Why the gap between potential and reality? Why does it appear to be a lot easier to appoint a diverse board than to make it function well?
Blame it on human nature: As much as diversity is something we prize, the truth is that people often feel baffled, threatened or even annoyed by persons with views and backgrounds very different from their own. The result is that when directors are appointed because their views or backgrounds are different, they often are isolated and ignored. Constructive disagreements spill over into personal battles.
But the solution is not to give up and avoid diversity. Rather, boards need to minimize the friction that diversity often introduces. To unlock the benefits, in short, boards must learn to work with colleagues who were selected not because they fit in—but because they dont.
Our research sheds light on some of the hurdles that diverse boards face, and on solutions for maximizing the benefits such boards offer.
Where Diversity Goes Awry
Initial Encounters. The problems start from Day One. At the very first meeting, d
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