Diversity is more than a buzzword. Back in 2015, McKinsey & Company called it “a competitive differentiator that shifts market share toward more diverse companies over time.” McKinsey’s research also found that companies scoring the highest for racial, ethnic and gender diversity are more likely to have financial returns above national industry medians.
There are benefits to age diversity as well, including increased productivity and reduced employee turnover, both of which can affect a company’s bottom line. Even socioeconomic status, sexual orientation, mindset and cultural background are ranges of diversity that can arm any team, including a company board, with a competitive advantage.
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With recession looming, having a strong board is now more important than ever.
First, COVID-19. Then, health mandates. Add in choked-up supply chains, the Russia-Ukraine war, rising prices, interest rates, and inflation. Economists are starting to unite around the prediction — a recession is inevitable.
No one has a crystal ball, and the future seems more uncertain than ever, but if we break these problems down (e.g., pandemics, war, and rising food and fuel prices leading to a recession), we realize that many of us have lived through similar challenges before. Either we made it out on the other side alive and thriving, or we made mistakes and learned what not to do. These insights are valuable for getting through this next round of uncertainty.
Alone, a business owner can see issues from a limited amount of angles. Especially as first-time leaders, it can be hard to think outside the box with little experience to reference. But, with a board, its members’ expertise can help in more informed decision-making. Leaders can lean into the diverse range of expertise their board members have — their “been there, done that’s” — to tackle challenges and opportunities better and get their company through even the toughest of times, including the oncoming recession.
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The goal of a board is to mentor a company, guide its decisions, and provide advice on best practices. However, most companies don’t consider the benefits that come from mentorship: Greater awareness of new ways of thinking, a challenge to our limiting assumptions, and the sharing of valuable life lessons we have yet to gain. What better way to tap into the skills and expertise board members bring than to connect them with people in the same company looking for mentorship?