Cognitive diversity in the boardroom

Cognitive diversity isn’t an automatic result of boardroom diversity initiatives. Krishna Grenville-Goble, Director of Inclusion, Diversity and Equity at KPMG’s Board Leadership Centre, has highlighted the importance of monitoring diversity in styles of thinking when it comes to a group’s ability to make decisions effectively.

Many will be familiar with the acronym ‘VUCA’, which stands for volatility, uncertainty, complexity and ambiguity, and is often used to describe the current business and geopolitical climate. BANI – brittle, anxious, non-linear and incomprehensible − is another, newer term that can be applied to the unpredictable world in which we find ourselves. That new terms are being coined to describe current state of affairs would suggest we may be grappling with this instability for the foreseeable. For organisations operating in this challenging environment, the ability to be innovative and agile in the way they approach problem-solving has never been more relevant.

One way in which boards may seek to equip themselves to meet these challenges is through increased diversity, with diverse boards having been cited as contributing to improved organisational performance. Part of the benefit of board diversity is that it can provide a range of perspectives and approaches – cognitive diversity. This can reduce the risk of groupthink, a dangerous dynamic in which ‘poor decisions can go unchecked,’ according to Krishna Grenville-Goble in a KPMG report entitled Critical thinking – embracing cognitive diversity in the boardroom.

Cognitive diversity relates to the way people think, rather that diversity characteristics of each individual. Boards − and the governance professionals who work alongside them − may want to consider whether they have the right balance of people who are: 

  • risk cautious vs risk adventurous
  • idea initiators vs idea generators
  • diplomatic vs forthright
  • task oriented vs people oriented
  • detail oriented vs strategic thinkers who see the bigger picture
  • collaborative vs autonomous
  • logical vs emotional.

Gender and ethnic diversity have tended to dominate conversations about board diversity until recently. Socioeconomic diversity and neurodiversity are starting to gain more attention – as will be discussed at our upcoming ESG Summit. Krishna acknowledges that ‘Perhaps the benefits of diversity have been somewhat “mis-sold” with the presumption that hiring people from historically excluded groups will automatically result in increased performance. But for these efforts to be truly effective and ‘bear fruit’, board diversity will require a different skillset/approach. It not only requires the recruitment of diverse board members that bring different skills and perspectives, but also requires leadership that can leverage that diversity and bring out the richness of the board as a whole.’

KPMG engaged the University of Leeds to conduct a literature review which identified four ways in which cognitive diversity could benefit organisations as part of their broader DEI strategies.

  1. ‘Boards should ensure that they create an inclusive culture that allows diversity of thought to thrive in pursuit of better decision-making and oversight.
  2. Progress on diversity of the full of protected characteristics needs to benefit from the consideration of cognitive diversity. Cognitive diversity should be considered as connected to but not displace, other IDE initiatives.
  3. Leadership training should include interventions to allow diverse opinions to be expressed and valued, breaking down long-established traditions. It should not be assumed that the benefits of cognitive diversity can be achieved simply through the recruitment and promotion of individuals of different backgrounds and experiences.
  4. The intersectional experience of board members might be a progressive means through which cognitive diversity can be achieved. Recognising people’s intersecting experiences could provide a different approach to solve problems.’

 Achieving cognitive diversity on boards requires a proactive approach and should be included in discussions around board composition and succession planning. While it sits alongside more familiar EDI activities, cognitive diversity cannot be expected as an automatic result of these initiatives. With organisations needing to be better equipped than ever to respond to the rapidly changing world, the additional insights that may be gained through having a board that can interrogate decisions and come up with innovative solutions cannot be undervalued.

Krishna Grenville-Goble will be speaking in a panel session at our upcoming ESG Summit.

You can read Critical thinking – embracing cognitive diversity in the boardroom on the KPMG website.

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