What is ‘cognitive diversity’ and why is it so important to have it on boards?

Posted in: Business and society, Diversity, Governance, Research

In recent years corporate boards have made enormous strides in improving their diversity, specifically in relation to gender. But how can they improve their cognitive diversity? A recent report by Johanne Grosvold and Scottish Widows looks at this issue in detail, exploring why cognitive diversity is central to the long term success of boards and how they can achieve it. She explains their findings here.

Cognitive diversity reflects the different ways we as people process knowledge, problem solve, understand complexity and learn. Increasing cognitive diversity can lead to less groupthink, better decision-making and can enable firms to better respond to their stakeholders. In a collaborative project with Scottish Widows, we developed a report looking at the role of cognitive diversity in the context of corporate boards. The report, Great Minds don’t think alike, combines insights from academic research into cognitive diversity and data from interviews with currently serving board directors, chairpersons of boards and representatives from the executive recruitment industry. Our findings outline the benefits of cognitive diversity and show how boards can become more cognitive diverse.

The importance of cognitive difference 

Corporate boardrooms are now much more gender diverse than they were in 1999 when the first FTSE Female Board Report was published by Professor Sue Vinnicombe and colleagues at Cranfield University. UK PLC have made enormous strides in making their boards more gender diverse. However, whereas boards are now more gender balanced, questions are being asked as to whether those who serve on the board reflect a sufficiently broad set of socio-economic backgrounds, educational diversity, experience and knowledge. Corporate board positions by their nature are elite roles, which come with a set of formal requirements necessary to serve. However, over the course of time there is a concern that recruitment has been narrowed to an existing pool of talent, which prevents the recruitment of people who are cognitively meaningfully different. A persistent lack of different perspectives can impair decision making and competitive advantage, and have meaningful negative consequences. For example, the recent initial report into the UK’s handling of the COVID-19 crisis singled out groupthink as a contributory cause to some of the poor decisions that were made in the initial stages of the pandemic. In the extreme, groupthink can have devastating consequences.

How to improve the diversity of boards?

Across the directors we interviewed we found that there was increasing awareness of the potential for cognitive diversity to positively impact on board and firm performance. Directors were positive about the idea of cognitive diversity and identified clear opportunities for broadening this aspect of board composition though e.g. the recruitment of directors from different socio-economic strata, from different regional backgrounds, and by getting input from younger professionals.

One way of achieving greater cognitive diversity would be to revisit the recruitment criteria for the board. A recruitment professional we spoke to noted that whilst some traits and characteristics are essential to serving on the board - e.g. the ability to read a set of annual accounts - other criteria (e.g. previous PLC experience) is not essential but still often included, which may inadvertently narrow the candidate pool. If a candidate fulfilled the must-have criteria, whether their prior experience was from a PLC or another major government or NGO institution may be less important. Recalibrating the secondary recruitment criteria could help widen the talent pool.

Breaking the mould

In discussing how to widen the cognitive inclusion of boards, the role of the board’s Chairperson became clear. Directors and chairs themselves recognised that in order to realise the value of cognitive diversity through those recruited to the board, the Chair must effectively bring these different perspectives into the discussion. They must make any board director who breaks the mould feel valued and accepted and not like a token.

Through our work we identified several ways that Chairs can help, including spending time developing a rapport with individual directors as a way to confer trust. Such rapport would give directors confidence to speak up, being aware of their own bias and preferences. Then they, in turn, would try not to let this shape their view of cognitively different perspectives, and foster a strong team culture based on clear common values and objectives.

It is important to note that cognitive diversity is not a substitute for gender and ethnic diversity. Rather gender and ethnic diversity can help improve cognitive diversity and strengthen yet further to breadth and depth of knowledge of the board.


Read more about the report and catch up with the launch event here.

Johanne talks more about the report in these video interviews.


Posted in: Business and society, Diversity, Governance, Research


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