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The topic of board diversification was until recently an exercise in corporate social responsibility, ethics, morality, and in some parts of the world such as Norway, regulatory compliance. Today, this discussion has moved well beyond the moral imperative to a new discussion. Core business concepts such as competitive advantage, organizational performance, creativity, innovation and shareowner value are the new talking points linked to a diverse slate of board directors. From a conceptual perspective, the diversification of talent at the top of the company lends itself to a solid risk management strategy. Basic portfolio allocation theory suggests that a more diverse basket of equities tends to lead to lower levels of equity risk.
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