Globally renowned expert advisor and broadcaster on culture, accounting, finance, business ethics, holistic education and leadership

The Davies Report reviewing Women on Boards recommended that UK FTSE 100 companies should aim for a minimum of 25% female board members representation by 2015. Atul Shah disagrees with Lord Davies’ approach and argues that there is more to boardroom diversity than the number of women around the table.

My latest research on diversity in the Boardroom, sponsored by the international accounting firm Mazars was launched at the annual Equality conference hosted by Employers Network on Equality and Inclusion (ENEI) in London on 14 March 2012. It generated a lot of interest and comment, and is already attracting media coverage nationally.

I am a writer, broadcaster and consultant on Diversity, and have been reflecting on the themes of leadership and diversity over several decades. For this research, I decided to draw upon my own experience of being a Board member of national bodies, and interviewed prominent Board members and stakeholders directly involved in the Board appointment process. Among the people I interviewed were Ruby McGregor Smith, CEO of MITIE, Nick Marsh of Harvey Nash headhunters, Anne Watts, Chair of the Appointments Commission and Prof. Binna Kandola of Pearn Kandola. The full details of the research, the interviews and findings are published in the book ‘Boardroom Diversity – The Opportunity’ which you can download from my website.

Here is a summary of the key findings:

1. The Davies Report has taken the whole issue of Boardroom Diversity backwards rather than forwards by focussing purely on women. The key secret is to avoid groupthink and draw from people with a wide range of experiences and skills, and not from narrow social classes and monocultures. In fact, if women from the same culture are appointed, they could be perceived as less of a threat than people from different cultures. Boards seem to be afraid of differences, and that is wrong. Challenge should be allowed and welcomed as a way of mitigating risk.

2. Diversity is a huge opportunity for business to improve its innovation, leadership and portray an open and inclusive culture, vital to the future of any global business today.

3. Leaders are by and large ignorant of the meaning and nuances of equality, especially in the area of cultural intelligence, which is clearly not valued in the Boardroom.

4. Leaders need to walk their talk and not rely on policies and statements to show intentions. They are failing in their leadership of the culture of the organisation if they do not change their behaviours. At present, the evidence suggests that there is a lot of unconscious bias.

5. Holistic thinking and leadership is the call of the hour, and Boards need to draw from world wisdoms to enrich their thinking and actions.

6. There are a large number of competent leaders available, if the definition of leadership is allowed to widen from its very rigid and narrow confines in the Corporate Boardroom.

7. The UK public sector has a very transparent and adjudicated process of appointment which helps increase diversity. In the private sector, the appointments process is opaque and a closed shop – another sign that Executives do not want challenge. Governance skills can be very strong in the public sector, and the private sector could draw from such leaders for its Board membership.

8. The merit rhetoric of appointments by Corporate Boards is false and tiresome. Board members are not appointed on merit, and this lie should not be repeated. In fact if emotional and cultural intelligence are added to the merit equation, the whole outcome would change.

9. Stakeholders such as investors and fund managers should put pressure on management to diversify. They are not doing so at present.

Above all, diversity is a huge opportunity for Boards to upscale their leadership and organisational culture, and this should be seized with gusto and not massaged or avoided.

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