Jul 12 2011
There is a general acceptance that if member states/companies do not move to a more diverse board structure voluntarily, European legislators will enforce quotas in order to increase the pace of change and ensure greater female representation in listed companies across Europe. Why is that?
- There is mounting socio-political pressure in Europe to appoint more people from chronically under-represented populations, notably women and ethnic minorities, to reflect better the demographics of the company’s own customers and employees. Diversity is critical to the success of every firm exposed to the forces of economic globalisation.
- The ever-increasing complexity of the issues discussed at board level, requiring boards to appoint more individuals with specialized and/or issue-specific expertise. A diverse team of highly qualified people with different backgrounds, specialties, and forms of expertise is needed to help solve more global and sophisticated problems.
- The recent financial crisis saw a number of prestigious (but relatively homogeneous) Boards fail to weather the storm. Greater Board diversity, in this respect, is being presented as part of the solution to improve corporate governance.
- More generally, gender diversity is increasingly accepted as a good thing since a number of surveys have indicated that there is a positive correlation between greater female representation on company boards and company (share price) performance. Simply put, Board diversity is a driver of high and sustainable performance.
This article was written by Christophe de Callatay, Managing Director for Europe at the Association of Executive Search Consultants (AESC).
BlueSteps is the exclusive service of the AESC that puts senior executives on the radar screen of over 6,000 executive search professionals in over 70 countries. Be visible, and be considered for up to 50,000 opportunities handled by AESC search firms every year. Find out more.
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