Jared L. Landaw, Partner and Chief Operating Officer at Barington Capital Group, L.P.
Demographic diversity alone doesn’t guarantee a board will have a healthy variety of viewpoints on key issues. Instead, companies need to consciously design boards to expand cognitive diversity in the boardroom or risk winding up with directors who have very similar backgrounds and perspectives. That’s according to a new article in Harvard Business Review by Jared L. Landaw, Partner and Chief Operating Officer at activist investment firm Barington Capital Group, L.P. Mr. Landaw’s views are based partly on confidential interviews with 18 directors who served on the boards of companies subject to shareholder activism by Barington.
“Cognitively diverse directors were frequently able to share valuable insights with their fellow directors, expanding the board’s understanding of the company and the strategic and operating issues it faced,” Mr. Landaw wrote. “We also found that they were more likely to ask tough questions and challenge the proposals of management and their fellow directors than incumbent directors who were long-tenured or had personal or professional relationships with others in the boardroom.”
Mr. Landaw’s article also includes a list of recommendations for boards seeking demographically diverse directors who also help improve cognitive diversity and overall board performance.
Jared L. Landaw is a partner, and the Chief Operating Officer and General Counsel, of Barington Capital Group, L.P., an activist investment firm that assists publicly traded companies in designing and implementing initiatives to improve long-term value. He is a frequent speaker on corporate governance, shareholder activism and board diversity.