Multiple Diversity – Existential Challenges for Boards and Top Management Teams

Diversity on boards of directors and supervisory boards?

In the current debate, the increasing heterogeneity of members of top bodies (top management teams, supervisory boards, boards of directors) is seen as desirable for very different reasons. The public discussion on diversity in top bodies mainly relates to the dimension of gender. Origin is less often addressed, and age, disability, religion and sexual orientation have hardly played a role so far. Several European countries have introduced regulations on (gender) diversity in boards – partly in the form of legal quotas, and partly as targets in corporate governance codes.

Nearly twenty‐​five years ago, Ely & Thomas from Havard University (Ely & Thomas, 1996) published the results of a qualitative study, the findings of which have since run like a thread through numerous publications on this topic. These are accentuated, depending on the interests of the finders. Their first study examines different perspectives, whose questions and results are applied to top teams: Multiple diversity in top committees leads – so the reasoning goes – in several ways to greater economic success in the first instance: an organisational committee made up of people with a variety of characteristics and multiple attributes thus has diverse experience, perspectives and competences. Greater creativity, flexibility and innovative strength are expected here. In addition, an organisation with a diverse top management can better anticipate the interests of its equally diverse clientele. Staff belonging to different social and ethnic groups can be better recruited, retained and motivated. Such a composed body sends the signal that the organisation is free of prejudice and discrimination. Moreover, the inclusion of persons from different characteristic groups in economic decision‐​making positions follows a moral imperative that contributes to reducing the disadvantage of members of these groups in our society. The authors ultimately conclude that »only the integration‐​and‐​learning perspective provided the rationale and guidance needed to achieve sustained benefits from diversity.« (Ely & Thomas, 2001).

Almost a quarter of a century later, the same authors paint a sobering picture (Ely & Thomas, 2020). They are very unsparing in their reckoning with those studies that simply claim the economic advantage of multiple diversity in superficial ›performance studies‹. And they criticise the ignorance that can be observed in practice with regard to the many preconditions that are necessary for an effective organisational culture of diversity: »those studies show correlations, not causality. In all likelihood, some other factor—such as industry or firm size—is responsible for … improvement in a firm’s performance … The problem is that nearly 25 years later, organizations have largely failed to adopt a learning orientation toward diversity and are no closer to reaping its benefits. Instead, business leaders and diversity advocates alike are advancing a simplistic and empirically unsubstantiated version of the business case. They misconstrue or ignore what abundant research has now made clear: Increasing the numbers of traditionally underrepresented people in your workforce does not automatically produce benefits. Taking an ›add diversity and stir‹ approach, while business continues as usual, will not spur leaps in your firm’s effectiveness or financial performance. Increasing diversity does not, by itself, increase effectiveness; what matters is how an organization harnesses diversity, and whether it’s willing to reshape its power structure. … Having people from various identity groups ›at the table‹ is no guarantee that anything will get better; in fact, research shows that things often get worse, because increasing diversity can increase tensions and conflict. Under the right organizational conditions, though, employees can turn cultural differences into assets for achieving team goals.« (Ely & Thomas, 2020).

How can multiple changes of the composition at the top management level be understood existentially in terms of their impact on organisations? What framework of understanding does existential thinking offer for this, which at the same time guides action? What contribution must or can the top management team, the board, make here? And what does this require in terms of an understanding of the commonality of being human within organisations and, if necessary, the development of an inner attitude? And in what way can this path be followed?