PROMOTING DIVERSITY IN THE BOARDROOM

Companies operating in today’s business climate face a number of significant concerns and challenges. One of the most important considerations revolves around the concept of diversity, in the boardroom and at the non-executive level.

Most companies want to achieve diversity but often do not know how to realise their goal. Diversity can be a difficult concept to grasp. Often the emphasis lies with companies recruiting non-white executives and directors and expecting those new hires to blend in sufficiently with the company’s existing corporate structure. There are some who see the clamour for greater diversity in the boardroom as little more than an exercise in political correctness. However, a topic as important, and as challenging, as diversity should not be so easily dismissed.

It stands to reason that the backgrounds of board members should reflect the nature of the business they represent. Over the last 20 to 30 years, not only have we seen firms becoming more complex, we have also seen a huge swing towards globalisation and heightened regulation. The business world, like society in general, has changed, and a more diverse group of business leaders may be required to take businesses forward.

Diversity issues tend to be more pronounced when they involve a firm’s upper echelons. Assembling a high quality board of directors can be a difficult task. Each member of a company’s board must bring her own abilities and dynamism to the role. Equally, candidates to the board must be of sufficient calibre to elevate the group. Furthermore, the right boardroom candidates must also bring her own individual perspectives and personality traits to the position, but not in a way that hinders the effective execution of corporate governance and strategic oversight. Individuals nominated to the board must be experienced, responsible and open to collaboration with their colleagues. They must be able to identify and evaluate risks and opportunities wherever possible, and provide the firm’s chief executive with considered, sensible counsel.

Jul-Sep 2014 Issue

Richard Summerfield