Thread by @martincpvalk

1/12
I've seen diverse opinions on Twitter about @Ripple joining #TheBoardChallenge

I used to believe that the best person should get the job. Period.

Gender, ethnicity, age, and geography were irrelevant as long as you were the best at the job.

That's changed

Let me explain:

2/12
There's one major problem with that. Who gets to decide who the best person is? That would most likely be the incumbent board members. Who in most cases have been selecting likeminded people for years, and have ended up with a fairly homogenous group of individuals.

3/12
Does such a boardroom have exposure to a wide enough range of perspectives to facilitate robust discussions of the issues that arise?

4/12
The composition of the board should reflect a sufficient mix of individuals with relevant knowledge, independence, competence, industry experience and #diversity of perspectives to generate effective challenge, discussion and objective decision-making.

5/12
A diverse board better understands its customer base and the environment that the business operates in. As a result of this enhanced understanding, the board is better placed to find and seize opportunities for #innovation, which ultimately creates #value for the business.

6/12
Boards should strive to create a balance between conformance and performance.

An optimally diverse board is primarily built on the foundation of a skills-based framework, taking into account the appropriate skills, expertise and experience necessary for proper functioning.

7/12
In other words, the first element of diversity — skill — should be the single largest consideration for the optimal board.

8/12
Once the appropriate skills, expertise and experience have been identified, other elements of #diversity should then be woven into the framework to allow for effective and robust decisionmaking and discussion in the boardroom.

9/12
The benefits of having a diverse board must be weighed up against the costs of doing so. Finding the appropriately skilled individuals who also match other desired elements of #diversity can be a difficult, time consuming and an expensive task.

10/12
This is especially true for boards operating in niche industries where highly specialised skills are required, causing the pool of potential board candidates to be reduced.

11/12
Although there are some challenges associated with having a diverse board, many of these may be viewed as temporary and will be far outweighed by the overall benefits of having a rich melting pot of diverse perspectives around the boardroom table.

12/12
Companies that fail to dip into the ever-deepening talent pool of diverse, well-educated and ambitious individuals run the risk of limiting #value creation, compromising #sustainability and undermining their long-term competitiveness.