Diversity and Directors and officers litigation

Diversity awareness is more important than ever before for senior management in all companies, as more and more investors, activists and shareholders, not to mention regulators, begin taking it more seriously. Those companies who put the correct emphasis on it can reap a number of different benefits. But, for those who don’t, a flurry of recent lawsuits should raise concerns that directors and officers might be impacted.

Diversity should be at the top of the agenda of all organizations, for ethical reasons, as well as for the financial benefits. Not only is it a metric to strive towards, but it is part of a successful revenue-generating business.

Companies putting emphasis on diversity are more likely to outperform their peers in terms of profitability, are more attractive to skilled talent and improve customer orientation. A lack of diversity is negatively perceived by investors, activists and shareholders and is also highly relevant to directors and officers (D&O) litigation. Changes in diversity legislation create additional pressure on companies to address the composition of their board and management team.

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