New report urges boards and executive committees to improve diversity

In July, the Chartered Governance Institute UK & Ireland and the Centre for Synchronous Leadership published a joint report revealing that an attachment to power is causing British boards and executive committees to exclude more diverse candidates based on flawed selection processes and criteria.

The report finds that the recruitment process is distorted by the assumption that those who do not resemble existing board and committee members are less ‘impressive’, which suggests that the word ‘impressive’ needs to be redefined. The report concludes that meaningful progress in terms of improving boardroom diversity can only be achieved if boards and executive committee members are willing to address ‘compulsive homogeneity’ and prioritise purpose over power.

Key findings of the report include:

Pre-COVID-19, one fifth of boards were unlikely to treat diversity of skills and experience as a priority and 44% of boards did not prioritise diversity of lived experience. 52% of boards never or rarely treated racial or ethnic diversity as a priority, 55% ignored age diversity, 65% never or rarely treated LGBTQ+ diversity as a priority and 73% did not treat disability diversity as a priority.
37% of the most insular boards, the ‘Bubble Bound’, failed to prioritise diversity of skills and expertise prior to COVID-19, and 39% now report that the current mix of skills and expertise is not aligned with organisational needs. 62% of the Bubble Bound did not prioritise diversity of lived experience, and 66% now report that they do not have sufficient demographic diversity for relevant perspectives to be represented in decision making.

Justine Lutterodt, Managing Director at Centre for Synchronous Leadership and author of the report, says:

“There is a difference between strategic diversity and compulsive homogeneity. Too often we attempt to make progress on the former, which is about optimising the mix of expertise and lived experience, without first tackling the latter. This report demonstrates the importance of establishing a healthy flow of power – by addressing barriers to board refreshment, creating effective mechanisms for accountability, and consciously cultivating a pipeline – if we are serious about genuinely moving the dial.

“Compulsive homogeneity has become even more of a business risk in the current environment, where the success of boards and executive committees is increasingly determined by their skill of leading in the midst of difference. Businesses that are only sensitive to the needs of those who have traditionally held positions of power will lose their legitimacy to lead a broader set of stakeholders and find themselves ill-equipped to stay on purpose in an increasingly complex and polarised world.”

Peter Swabey, Policy and Research Director at the Institute, concludes:

“Issues with boardroom diversity have been clear for some time. Research that we carried out with the London Business School Leadership Institute and Elisabeth Marx Associates in 2019 showed that British boardrooms have an over-reliance on Oxbridge and Harvard graduates and those candidates with a background in finance. We have also been stressing issues with the board pipeline in the FTSE 350 Boardroom Bellwether that we run in association with the Financial Times for years. Failure to reassess the status quo or refresh the board has a negative impact on good governance. Unless boards show a genuine willingness to capture the diversity of the society in which their organisations operate, they will continue to miss the opportunities that having greater insight and a wider mindset can offer.”

The report can be found here.

Published 29 July, 2021

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