There is a growing awareness among investors and corporate leaders that diverse boards help businesses better serve their customers, consumers as well as their employees and communities. Recent debates regarding gender and race-based equality in the workplace has also prompted state-level laws to increase and encourage diversity in corporate boardrooms.

Numerous studies have linked greater board diversity with superior company performance. These studies include an article from 2015 by McKinsey report that found companies with the highest quartile of diversity of race were 33 percent more likely to outperform those in the bottom quartile and a 2016 study which found that female board members are linked to lower earnings volatility and greater stock liquidity, as well as higher investor perceptions of company value.

These findings support the theory that cognitive diversity enhances board decision-making and improves the capacity of the board to effectively supervise and monitor management. The diversity of demographic traits, such as age and race, and gender, contributes to a more inclusive and respectful atmosphere within the boardroom. This fosters healthy debates and open discussions of ideas.

Another factor to consider is functional diversity, which refers to the diversity of knowledge and experience board members bring to the table. Having diverse functional attributes, such as the tenure of a board member and their education, increases the ability of boards to appreciate the cognitive resources of board members (like the skills and knowledge) which, in turn, leads to better board decision-making.

Boards should be proactive about diversity and employ a variety of techniques to seek out new members. But the most important thing is to ensure that all directors are in the importance of taking into consideration diverse viewpoints in boardroom discussions. If everyone is aware of why and how this benefits the company boards will naturally facilitate the exchange of views from different perspectives.