Why Diverse Perspectives in Leadership Actually Matter for a Company’s Bottom Line

Certain political winds are blowing against diversity and equality initiatives right now, including branding these efforts as illegal. There is, however, a ton of evidence supporting the beneficial effects of diversity for profitable businesses. And new research adds extra support to this position. It points out that diverse company leadership isn't just a buzzy psychological notion—it can actually lead to stronger, more morally responsible governance. The data could help your company shape its leadership team in the future, and it could even prompt you to ensure diversity and acceptance is ingrained into the business from the bottom to the top.

The study by a team of business researchers, looked into the link between diversity of company boards and one undesirable business habit: tax avoidance. This may sound like the conclusions would be quite niche, but tax avoidance is, theoretically, quite measurable compared to more ephemeral qualities like "company culture." The study’s results were consistent and very clear. When companies have boards that are more diverse, they tend to engage in less tax avoidance.

The team looked at data from thousands of companies over a 20 year period, and a broader meaning of diversity than you may be imagining—interpersonal diversity. This means people from different demographics, with different communications styles and mental perspectives, and it covers obvious differences like race and gender alongside subtler features like social status, neurodiversity and education. 

Please select this link to read the complete article from Inc.