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Cognitive Diversity: What is it, and why is it necessary at board level?

Diversity in corporate boards should reflect life experiences and the thought processes that influence these.

Boards are a well-established feature of the corporate world. Their presence in business is ubiquitous, with boards generally exerting considerable influence on how an organisation is run. As such, their potential for helping to shape companies’ policies on topics such as diversity, equity & inclusion (DEI) is significant. While the C-suite may seem like the most logical place to start from, businesses with active DEI programmes increasingly want the board to reflect their commitment to diversity – indeed, for change to come from the top down.

Companies that wish to address a lack of diversity can make a concerted effort to hire diverse candidates – something in which we, as an executive search company, have been pleased to notice an increase in recent years. The same principle also applies to corporate boards, which, historically, have not been particularly diverse places. But challenges remain: while the European Parliament recently passed legislation requiring EU companies ‘to have 40% of the underrepresented sex among non-executive directors or 33% among all directors by 2026’, a similar law being struck down last year in California also underlines the difficulty of making widespread changes to longstanding business practices.

When it comes to analysing diversity in professional life, we have seen gender and ethnicity receive increased attention in recent years. As valuable and necessary as it is to address shortfalls in representation in these areas, it is also important not to lose sight of other forms of diversity and what these can bring to a company. One related topic that is perhaps less talked about at board level is cognitive diversity – but what is meant by this term, and what impact can it have?

Unconscious bias and cognitive diversity – a brief overview

Cognitive diversity, put simply, means ‘the inclusion of people who have different ways of thinking, different viewpoints and different skill sets’. Integrating this into a company’s DEI strategy may seem straightforward at first glance, but cognitive diversity remains comparatively neglected in the workplace. Consider, for instance, the importance placed on culture in corporate settings. It is natural to want new hires to fit in with a company’s values and vision, but this can mean favouring certain kinds of people – or people with similar life experiences – over others who may not have had the same opportunities.

Unconscious bias is the name given to humans’ tendency to favour certain people over others – typically when they share things in common or come from similar backgrounds. Understanding of this term has grown over the past few years, and training on overcoming unconscious bias is also becoming more widespread. However, as with other discussions around diversity in professional life, gender and race are perhaps the most common topics for unconscious bias training. While this is laudable in itself, these matters should not be the only DEI-related areas for companies to address, both at board level and throughout an organisation.

Last year, research conducted by KPMG listed social class as the biggest barrier to career progression. Given that candidates from more privileged backgrounds are statistically likelier to have access to key determiners such as higher education and internships – not to mention the kinds of networks that can prove so useful to professional advancement – in the corporate world, this means that the likelihood of potential hires being from similar milieus, with less room for cognitive diversity, is increased. This situation is also reflected in boardrooms, where there appears to be a direct correlation between directors’ level of education and their salaries.

Addressing cognitive diversity

Bridging gaps in diversity is not just a question of fairness; research suggests that more mixed boards are actively beneficial for business. For example, a 2021 study by the Financial Reporting Council showed better future financial performance and higher stock returns among FTSE350 boards with significant gender diversity. Elsewhere, another report by Seattle non-profit BoardReady found that companies with diverse boards were better equipped to weather the effects of the COVID-19 pandemic than companies with less diverse non-executive directors.

For companies that want to increase cognitive diversity among their board, looking at the criteria for membership may be a good place to start. Could the process be simplified, and/or made more attractive to candidates from less traditional networks, regions, or demographics? Think about using objective criteria and avoiding the use of language that may exclude certain groups of people. Consider skills or values that you would like to bring to your non-executive directors, also, and diversify the talent pool when you begin to search for new members, rather than relying on your existing network. Look for candidates from diverse backgrounds and experiences, including different industries, cultures, and education. Indeed, thinking more in terms of 'culture add’ – i.e., what the prospective board member can bring to your organisation – than culture fit (that is, if they are already similar to your current directors), can be helpful.

In the end, everything trickles down from the board; the more diversity of thinking, experience, and background among your directors, the better prepared your organisation will be to make a real difference. From here, you can build on encouraging diversity and inclusivity at all levels of the business by implementing training programmes, promoting DEI initiatives, and encouraging open communication within your company. Regularly assessing and monitoring progress on diversity in-house – and creating an environment that’s open to different ways of thinking, where your employees can express themselves – is key.

At Venari Partners, we are delighted to advise companies about the makeup of their boards. If you would like assistance in rethinking how you elect your non-executive directors, don’t hesitate to get in touch.


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