New report by 4000+ company directors shares insights into boardroom diversity

New report by 4000+ company directors shares insights into boardroom strengths & weaknesses

4,000+ corporate directors offered their opinions in a new report recently regarding risk, the economy, boardroom diversity, as well as strengths and weaknesses within the boardroom.

A brand new report by professor Boris Groysbergand and Yo-Jud of the Harvard Business School, along with Spencer Stuart, the Women Corporate Directors and researcher Deborah Bell has stated that “Boards cannot afford to have directors around the table who aren’t delivering value”.

The report continues to state that as a result of enhanced institutional and activist shareholder action, as well as greater concerns over risk and threats from competitors, boardroom members are now adopting “a more strategic, dynamic, and responsive role” within their companies, and pushing “issues around board composition and diversity to the fore.”

In one of the largest boardroom surveys of its kind ever, over 4,000 male and female directors stretching over 60 countries were questioned.

The study from WCD was led by the CEO Susan Stautberg, and Spencer Stuart, and spearheaded further by head of North American Board Practice, Julie Hembrock Daum.

One of the major findings from the survey was the apparent “gap between best practice and reality” within boards willingness to deal with strategic challenges, with specific emphases upon talent issues.

Despite both public and private company directors naming “attracting and retaining top talent” as one of the main challenges which they face in terms of achieving strategic objectives, those surveyed also gave their boards low scores relating to such issues as boardroom diversity, HR management, succession planning and director evaluations.

The following key findings also came out of the survey:

• Directors believe Cybersecurity is among the top 3 political issues facing them. The issues stated by directors included the economy and regulatory environment, as well as Cybersecurity.

• Female directors offered increased risk concerns versus their male counterparts. Across the entire study, risks such as concerns surrounding activist investors, Cybersecurity, regulatory risk and the supply chain were more widely reported by female directors than by males.

• Tools to trigger board turnover are favoured by women more so than men. Direct retirement ages and term limits are favoured by females in an attempt to ensure fresh thinking when demands are placed on boards.

• Greater diversity is not always driven by enhanced scrutiny. Private company directors contain more female and ethnic minority board members, despite public companies having a greater amount of independent directors.

• The number of females in the boardroom is failing to increase. Both gender and generational divides were found when discussing the reasoning behind the lack of females within boards.

Findings showed that specifically older, male respondents believed that such stagnant figures are down to a “lack of qualified female candidates”.

Meanwhile, females cited the major reason is that diversity is not a priority when recruiting for board positions. Interestingly, males under the age of 55 believed that it is because traditional workplaces tend to be male dominated.

• Boardroom diversity quotas failing to be supported generally. Almost 75% those questioned fail to support boardroom diversity quotas. While 49% of female directors support them, a measly 9% of male directors do.

Are you a company director? Do you recognise these challenges in your boardroom? Are there other key challenges that aren’t mentioned here?

As always, we’d love to hear your thoughts and experience – feel free to leave them in the comments section below.

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