TOWARDS DYNAMIC GOVERNANCE 2014
17%
Proportion of women
58.2 30%
Director’s age Proportion of non-nationals
European board diversity averages
DIVERSITY OF THOUGHT
Diversity must be rooted in meritocracy and the attainment of business goals. The needs of the business drive diversity.
The stereotypical corporate board is male, pale and stale. “My memory from my fi rst board meeting as a director was how well reality corresponded with my prejudice,” one board member confi ded.
“I decided my role was to ask intelligent questions rather than make authoritarian statements. What I found around the table were old timers with diff erent ideas. They played their game and enjoyed listening to their own voices. Worst of all, they did not like team play. They were almost all CEOs, used to being surrounded by heel clicking associates. It didn’t take long before I became one of them and behaved as they did. The board represented superior strategic thinking, the VPs didn’t understand much, and when things didn’t work it was their fault.”
This stereotype has largely been consigned to history. Academic research (by Harvard’s Robin Ely and David Thomas among others) repeatedly proves that diversity pays off .4
There is appreciation that boards need to
contain a range of personalities, characters, skills and backgrounds if they are to function successfully. A total of 63% of survey respondents rated a diverse gender and nationality mix as being important for board eff ectiveness. If boards are to be more alert to the external environment their make up must mirror that environment.
The debate about diversity tends, inevitably, to focus on how many – or how few – women now sit on boards. This is undeniably important. But, despite all the publicity
4 Lagace, Martha, “Racial diversity pays off ”, HBS Working Knowledge, 21 June 2004
6 Towards Dynamic Governance 2014 – European Corporate Governance Report
TOWARDS DYNAMIC GOVERNANCE 2014
European Corporate Governance ReportEuropean Corporate Governance Report
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