Startup Boards, 2nd Edition

Chapter 12Board Diversity

While academic research on whether diverse boards lead to better company performance is mixed, the research is definitive that more diverse teams perform better and are more innovative than homogeneous teams. A recent Harvard Business Review article, “When and Why Diversity Improves Your Board's Performance,”¹ has a nuanced view in favor of board diversity. The authors found that diversity of thought and perspective, rather than individual diversity measures such as gender, race, or age, drive a board's success. Our perspective is that demographic measures of diversity are often drivers of diversity of thought and perspective, so pursuing an agenda of building a more diverse board gets you both benefits.

Unconscious Bias

Accepting the status quo is often default behavior in business. Unfortunately, that won't help you add diversity to your board. Wendy Lea (Energize Colorado, CEO) points out that “most founders are men and most investors are men,” which results in a self-referential good-old-boys network problem unless you make a proactive effort to do something different. While this dynamic is shifting, as more new founders and VCs are female and/or coming from historically underrepresented populations, it'll take time. While the bias that comes from homogeneous boards may be unconscious, there's a cost associated with lower performance and creativity. For example, in surveys, as many as 80% of startup women think diversity offers better problem ...