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Symposium 2011

Board Diversity and Corporate Governance

The Challenge

The global financial crisis has led to demands for greater transparency in corporate practices. But less attention has been paid to whom the players should be in this new environment. Corporate boards across the world generally have a predominance of male directors. Research shows a lack of diversity in terms of gender, race/ethnicity and international expertise at a time when “global” defines the business climate.

How can corporate boards become more reflective of stakeholders that have become more diverse in terms of consumers, workers, communities and shareholders? Is it desirable to change boards’ composition? If such changes are to proceed, by what methods should they be implemented? There are a variety of possibilities, including legislated mandates or quotas for women directors; Corporate Governance Commissions and Stock Exchange requirements on board diversity; and institutional shareholders pushing to nominate and create their own database of diverse directors.

Which of these possibilities, if any, are worth putting into practice and where? How are these measures expected to affect companies’ profitability? How could board diversity be accelerated without legislative mandates? Which measures can be expected to result in more women in senior management? If such changes are made, what impact, if any, will they have on corporate governance?

    Solutions

    Solution
    Symposium 2011

    Research and publications on the “business case” should be widely articulated by corporate leaders and advocates of board  diversity so that it becomes a more familiar context for women’s inclusion ...

    Research and publications on the “business case” should be widely articulated by corporate leaders and advocates of board  diversity so that it becomes a more familiar context for women’s inclu ...

    Research and publications on the “business case” should be widely articulated by corporate leaders and advocates of board  diversity so that it becomes a more familiar context for women’s inclusion on corporate boards.

    Business
    Solution
    Symposium 2011

    Use quota laws and enforce full implementation of these laws. Encourage greater transparency on voluntary targets and disclosure through security regulators in those countries where hard quotas are not accepted.

    Use quota laws and enforce full implementation of these laws. Encourage greater transparency on voluntary targets and disclosure through security regulators in those countries where hard quotas are no ...

    Use quota laws and enforce full implementation of these laws. Encourage greater transparency on voluntary targets and disclosure through security regulators in those countries where hard quotas are not accepted.

    Polity, Business
    Solution
    Symposium 2011

    The networks and registries of accomplished women need to be merged and made known to the network of corporate decision-makers.

    The networks and registries of accomplished women need to be merged and made known to the network of corporate decision-makers.

    The networks and registries of accomplished women need to be merged and made known to the network of corporate decision-makers.

    Business, Civil Society
    Solution
    Symposium 2011

    Establish male “champions of change”—corporate CEOs who can be the public voice for gender diversity on boards and in senior management, and who can even sponsor and mentor women for ...

    Establish male “champions of change”—corporate CEOs who can be the public voice for gender diversity on boards and in senior management, and who can even sponsor and mentor women for board place ...

    Establish male “champions of change”—corporate CEOs who can be the public voice for gender diversity on boards and in senior management, and who can even sponsor and mentor women for board placement.

    Polity, Academia, Business, Civil Society
    Solution
    Symposium 2011

    Codes of good corporate governance should include gender diversity as a key component.

    Codes of good corporate governance should include gender diversity as a key component.

    Codes of good corporate governance should include gender diversity as a key component.

    Business
    Solution
    Symposium 2011

    Executive search firms need to broaden their pool of candidates for board nominations and include women in any list of recommendations they give to clients. They should publicize this as ...

    Executive search firms need to broaden their pool of candidates for board nominations and include women in any list of recommendations they give to clients. They should publicize this as an advantage ...

    Executive search firms need to broaden their pool of candidates for board nominations and include women in any list of recommendations they give to clients. They should publicize this as an advantage of the services they offer.

    Business

    Proposals

    Proposal
    Symposium 2011

    Work with local securities exchanges

    Work with local securities exchanges to incorporate a requirement that all listed companies set “targets” for the number of women on the board and at senior executive level and report annual progr ...

    Work with local securities exchanges to incorporate a requirement that all listed companies set “targets” for the number of women on the board and at senior executive level and report annual progress against the target One reason many initiatives aimed at increasing women’s representation on Boards have not resulted in greater gender diversity is that they often fail to engage the corporate sector. Real change in the number of women appointed to Boards and at senior management level requires strong leadership and a robust commitment from the corporate sector, especially corporate governance bodies of local securities exchanges. Governance bodies of

    Polity, Academia, Business, Civil Society
    Proposal
    Symposium 2011

    Increasing diversity on Boards

    Increasing diversity on Boards will be achieved through increasing awareness of the value added when a Board is appropriately configured to reflect the global economy in which we all now operate. The ...

    Increasing diversity on Boards will be achieved through increasing awareness of the value added when a Board is appropriately configured to reflect the global economy in which we all now operate. The current business environment in the United States, coupled with increased regulatory requirements, have heightened the demand for accountability and transparency with respect to diversity, and women in particular, in the board room. Many countries have moved in the direction of quotas and mandates for women. Mandates and quotas may drive compliance, but will they drive genuine commitment? I would offer that increasing awareness of the issue, coupled

    Business
    Proposal
    Symposium 2011

    Investors encourage companies to change the director selection process and institutionalize a commitment to a diverse and inclusive boardroom

    Proposed Solution: Investors encourage companies to change the director selection process and institutionalize a commitment to a diverse and inclusive boardroom. At Calvert investments, we have long b ...

    Proposed Solution: Investors encourage companies to change the director selection process and institutionalize a commitment to a diverse and inclusive boardroom. At Calvert investments, we have long believed that there is a strong business case for board diversity. Our sustainability investment research process includes diversity as a key factor in selecting the companies that are included in our sustainable and responsible investment portfolios. We recognize corporate diversity as a key ingredient necessary to succeed in an increasingly global marketplace, where the ability to draw on a wide range of viewpoints, backgrounds, skills, and experience is critical to a company’s

    Business
    Proposal
    Symposium 2011

    Create a male leadership group to advocate

    Create a leadership group of influential male CEOs and Chairpersons from a diverse range of leading businesses to place the issue of women’s under-representation at decision-making level on the coun ...

    Create a leadership group of influential male CEOs and Chairpersons from a diverse range of leading businesses to place the issue of women’s under-representation at decision-making level on the country’s business agenda. One reason many initiatives aimed at increasing women’s representation at decision-making levels have not delivered thus far is that they focus solely on engaging and/or changing women—from the way women network to the way women lead. Too many organisations look to women alone to change the organisational practices that maintain the status quo. As we have seen in recent decades, this approach has had limited success. To accelerate

    Polity, Academia, Business, Civil Society
    Proposal
    Symposium 2011

    Create a ratings scheme to independently evaluate the gender diversity performance of companies and to encourage gender balanced board and staff recruitment and inclusive corporate cultures.

    This solution would involve the development of a rating scheme designed to benchmark sector leadership and to reward emerging commitment to greater gender diversity at the board and senior executive l ...

    This solution would involve the development of a rating scheme designed to benchmark sector leadership and to reward emerging commitment to greater gender diversity at the board and senior executive level. It involves the development of an independent voluntary ratings scheme which builds on current public reporting supplemented by an independent evaluation. This evaluation would be based on a rigorous, transparent research methodology enabling institutional comparison both within countries and beyond. Organizations that performed well would be able to communicate that excellence through a "gender star ratings scheme" in the same manner companies can now communicate their excellence in

    Academia, Business
    Proposal
    Symposium 2011

    Board Diversity and Corporate Governance

    European countries have led the most dramatic response to board diversity by instituting quotas for women on corporate boards. Norway led the way in 2003 by requiring 40% of board seats to be held by ...

    European countries have led the most dramatic response to board diversity by instituting quotas for women on corporate boards. Norway led the way in 2003 by requiring 40% of board seats to be held by women. They were swiftly followed by Spain (2007), Iceland (2009), France (2010) with the Netherlands (2010) and Italy (2010) having similar laws passed in their lower houses. Quotas on state-owned companies are also already in place in South Africa, Israel, Denmark, Finland, Iceland, Ireland, the cities of Berlin and Nuremberg in Germany and the province of Quebec in Canada. The European Parliament is also

    Polity, Academia, Business, Civil Society

    Implemen- tations

    Implementation
    Symposium 2011

    Elevating Representation of Women in Leadership

    Polity, Academia, Business, Civil Society