The other day, someone drew my attention to a recent white paper put out by the National Committee for Responsive Philanthropy (NCRP). The paper makes some interesting points to strengthen the case for more diversity on boards — a case that many of us argue for, including BoardSource.
NCRP researchers analyzed the long list of foundations that had invested with Bernie Madoff, looking for correlations between their boards of directors and their exposure to his fund. They concluded that a “notable homogeneity” existed among the board members of these organizations that, in their view, may have contributed to the lack of due diligence that would have revealed the fraud. They postulate that in any homogenous group there may exist an implicit and dangerous “trust in the familiar.” Combined with a culture of collegiality (the overly polite kind) that still prevails in many boardrooms, an atmosphere can ensue where certain decisions, even investment decisions, seem beyond question.
Increasingly, the case is being made for the need for “cognitive diversity” – different experiences, cultural heritages, and backgrounds – as a prerequisite for the possibility of improved decision-making in the boardroom.