Three Factors That Are Organically Driving Board Diversity

The calls to diversify board leadership are justified for many reasons. First, it’s about time corporate leadership started looking like the rest of the employee base and the customers they serve. Second, diverse leadership can have a positive, cascading effect on inclusion and company culture. It has also proven to lead to better decision-making and more profitability.

The value companies are seeing from board diversity is not merely from the presence of a woman or person of color. Today’s newest board members bring different skill sets and commit more time to the job. More than any regulations, these needs are going to help improve representation on corporate boards in the years to come.

Friso van der Oord, senior vice president at the National Association for Corporate Directors, told Fortune that board turnover has gone up lately and he expects it to increase due the urgent need for board members with more free time and wider-ranging skills.

The emergence of ESG has also come through in recent board appointments, van der Oord shared. NACD analysis of MyLogIQ data found that the presence of board members with ESG backgrounds has doubled since 2018, from 6% to 12%, and HR or human capital nearly has as well, growing from 6% to 11% in their presence on boards. Those with technology expertise increased from 34% to 43%.