Corporate governance – how are we getting on with board diversity?

 

 

      The spotlight is now not just on how much directors are being paid but also on who sits on the board of directors, for how long and how diverse this mix is. As Lord Davies of Abersoch puts it, “corporate boards perform better when they include the best people who come

from a range of perspectives and backgrounds” and this, in turn, leads to better decision making.

      The Nomination Committee is now under scrutiny particularly with regard to gender diversity. In 2010 women made up only 12.5% of the members of the corporate boards of FTSE 100 companies. But it’s not all about hitting quotas and numbers. Although it might seem that the UK is on track with the government’s 2015 target of 25% women on boards of FTSE 100 companies with 20.4%, when we look more closely, only 7.2% of these are Executive Director posts.
      So what more needs to be done? What about ethnicity and the LGBT community and how other groups of people are being represented? The press have focused on women but there needs to be true diversity of thought and a willingness to embrace this. Rather than focus on quotas, surely we need to ensure that robust and fair development programs are in place to ensure the best people can rise up the ranks and join the leadership teams?

10 April 2014

 

 

written by Jon Moores
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