You’ve probably heard the business case for diversity. Advocates say this kind of progress doesn’t only benefit the employees, it also benefits the employer’s bottom line.
But how a company defines “diversity” is equally important.
Executive Brief
When some boards claim they have a diverse membership, they refer instead to a “diversity of knowledge, skills and experiences” — not necessarily a diversity of identities, according to Marta Geletkanycz, associate professor of strategic management at Boston College.
Research shows that when we water down the definition of diversity — moving beyond demographic differences, like identity and background, to instead prioritize experiential differences like job or title or work experience — we’re not making progress on diversity.
“We’ve redefined diversity, and when we redefine diversity to include anything, well then, this is what’s contributing to racial, ethnic gender diversity slowing down,” she says.
This problem has felt all the more urgent in recent months. Even as California introduced legislation mandating at least one woman on every public company board, overall board diversity has made little progress. According to some studies, women of color have lost board seats across the Fortune 500. Over the last decade, the number of minority board directors has also declined.
But these other definitions of diversity are important, too, according to Cynthia E. Clark, professor of management at Bentley College. A board on which everyone thinks the same is not an effective board, she says.
“Cognitive diversity” or “diversity of thought” is about differences in how people think and solve problems. A group of people with cognitive diversity may be made up of an accountant, a designer, an engineer and people from other disciplines.
“We’re not ever going to say cognitive diversity doesn’t matter,” Clark says. “On a board, it matters. We want people to say, ‘I don’t share that view. I want people to do X.’”
But by putting too much weight on this broader definition of diversity, firms often drop the other aspects of diversity that are too often neglected.
Focusing on this definition of diversity overlooks centuries of institutionally sanctioned oppression and discrimination, forces that kept minority groups from ever breaking into the boardroom, says Isaac Sabat, assistant professor of psychology at Texas A&M University.
“I think a lot of it comes down to this big question of ‘What identities should we care about when it comes to diversity and inclusion?’” he says.
But when organizations refuse to tackle this question, that means they also miss out on the benefits of a truly diverse membership, Geletkanycz says.
The solution: consider both of these definitions of diversity — the broader definition and the more specific, identity-based definition. Often, one feeds the other.
“I think that if you’re focusing on knowledge, skills and experience, you could much more easily hire a board that’s 12 white men,” Clark says. “That’s not to say that board would be sub-optimally functioning. It could be a really good board, but it’s not visibly diverse, and that’s really important.”
Companies need to be aware of the signal these choices send to people from underrepresented groups, Sabat cautions. A board of 12 white men may be diverse in some ways, like in how they think about work or approach problems. But on paper, it’s likely still not representative of society at large.
“They haven’t achieved diversity,” he says. “They’ve just achieved these differences in thought, and it’s a homogenous group. It does a disservice to other people who have these minoritized identities.”
