Tag Archives: Corporate Board

Why It’s Important to Have Diversity (in age!) in Your Work Teams

If you had to guess, would you say that younger people or older people are better at learning abstract causal principles?

When first thinking about this question, I would have thought that older people would be better at this given that they have more experience and that they might have been in analogous situations. However, the research seems to indicate that younger folks are better at things like this. Here’s a passage from the researchers that specifically address my thought that experience would be helpful:

The very fact that older learners know more may make it more difficult for them to learn something new. Once a learner has inferred a general principle (e.g., that people act because of their traits, or that individual objects, rather than combinations of objects or relations between them, have causal powers), that principle may constrain his or her interpretation of new data. Causal relationships that conflict with that principle may then be more difficult to learn.

Certainly this research is important, but the thing I want to highlight here is work teams. Specifically, this study points to the importance of having diverse w0rk teams. It’s important to remember that diversity doesn’t just mean people of different genders and different races, but people of different ages, too. If we mix in folks with different “levels of experience,” we might have a better chance of coming up with a solution to the issue than if we just used folks who were all of the same level experience.

Further to that, I was thinking about how this research comes into play when we think of top management teams or corporate boards. Recall the post I wrote recently that discussed the importance of diversity at the board-level. I don’t remember there being anything related to age in that article, but I also suspect that conducting research on age as it relates to boards or top management teams might be difficult. Usually, we find folks who’ve reached a certain level of experience before they’re considered for work on a corporate board or considered for a promotion to the top management team. Maybe we need to start thinking about considering some younger folks for positions in these roles.

ResearchBlogging.orgGopnik, A., Griffiths, T., & Lucas, C. (2015). When Younger Learners Can Be Better (or at Least More Open-Minded) Than Older Ones Current Directions in Psychological Science, 24 (2), 87-92 DOI: 10.1177/0963721414556653

Board Diversity Paramount for Achieving Corporate Benefits

Earlier this year, there was some interesting research published about board diversity, as it relates to achieving corporate benefits. Specifically:

Board diversity improves governance and product development especially in firms led by White men CEOs. There are at least two important implications of these findings. First, we have no evidence that firms with White CEOs and diverse boards experience greater conflict than other firms due to distrust, lack of social similarity, or resultant communication barriers. Indeed, it appears that the presence of ethnic diversity on the governing body only advances strong corporate governance.

I should clarify that the researchers acknowledged the limitations of their findings because they limited their sample to Fortune 500 companies. The second implication:

Diverse leaders may bring perspectives, priorities, and ideas to organizations that significantly affect organizational trajectories. In particular, minority leaders at the board level affect the likelihood that a firm will pursue strong governance and effective product development. This strongly supports the business case for diversity. Our findings also suggest that relative numbers and influence on the board in conjunction with the CEO matter for realizing the benefits of diversity. Both the percentage of minorities on the board and the presence of influential minorities significantly impact governance and product innovation when traditional leaders serve as CEOs.

This is certainly not the first study published about the importance of board diversity, but I find this one particularly interesting because it puts things in the context of corporate benefits, which is something that I would think might be more likely to motivate action.

The researchers also draw attention to a specific avenue for further research: top management teams. I would suspect that we might find a similar effect, with regard to diversity, when studying the composition of top management teams. The importance being that different perspectives are represented and diversity is one of the ways to do that. It could be, however, that this same effect doesn’t hold when analyzing the level of top management teams, which would then increase the importance of having diversity within board composition.

ResearchBlogging.orgCook, A., & Glass, C. (2014). Do minority leaders affect corporate practice? Analyzing the effect of leadership composition on governance and product development Strategic Organization, 13 (2), 117-140 DOI: 10.1177/1476127014564109