The imminent release of the Lord Davies report on gender in the Boardroom is causing widespread debate in the press.
We see this debate as positive for Boards but wish to highlight that this issue is more about diversity than about gender which should not be the only diversity considered when determining the correct balance on the Board.
One debate about the need for quotas – there are men and women who have polarised views on this matter ranging from –– This will be the only way change will be forced to materialise – Quotas will undermine women’s position on the Board being achieved on merit
A further issue being raised but not yet adequately addressed is how the market finds eligible candidates for the Boardroom that offer the diversity the Board requires. This is going to require a change in approach by nomination committees and search firms.
At present the approach is still about safety in the “known” and the same pool of people are being reviewed for positions as NED’s rather than looking at individuals who are competent and offer the diversity that is needed. This would require looking at individuals who have one or more of the following –– Industry experience – Entrepreneurial experience – Experience in smaller companies – International experience – Specific skills or knowledge of a subject – A generalist with good common sense – Regulatory expertise – Knowledge of the consumer – Geographic information – And other similar contributions …
Chairmen need to guide their “gap” analysis of skills needed and rethink their determination of director specifications to consider addressing options outside the normal tick-boxes.
It is the Chairman’s guidance to the nomination committee and search firms that will provide the market with the confidence to be more creative and less risk averse in reviewing potential candidates.
Boardrooms will benefit from a more balanced and diverse Board.