DIVERSITY FALLING DOWN THE BOARD PRIORITIES LIST
The biggest challenges facing boards and management teams include climate change, expanding social activism, exponential developments in digital technology, increasing geopolitical instability, and other megatrends impacting business and work environments.
At the same time, investors and other stakeholders are expecting boards to focus on environmental, social and governance (ESG) matters alongside long-term sustainable performance.
Modern boards need to engage more proactively, deeply and frequently with stakeholders, and act as fast-changing drivers of strategy and risk management. This, in turn, requires greater levels of diversity to cope with the variety of unfamiliar obstacles in their path.
However, all of this change comes at a time when some of the UK’s biggest companies stand accused of failing to reach gender board diversity targets in circumstances that could seriously damage organisational reputations and the opportunities offered by embracing new sources of expertise and fresh styles of leadership.
In 2016, The Hampton-Alexander Review, an independent, business-led framework supported by government recommendations, produced guidance on how FTSE 350 companies needed to improve the representation of women on their boards and in leadership positions. The Review set a minimum 33 percent target for women on FTSE 350 boards, alongside the two layers of leadership below the board – the executive committee, and the direct reports to the executive committee – by the end of 2020. It is now clear that significant action is needed from all FTSE 350 companies to achieve these goals.
Progression in diversity that UK boards have made over the last quarter of a century suggests that self-regulation offers some capacity for progressive change.
Jan-Mar 2021 Issue
Henley Business School