The emphasis that is increasingly being placed on diversity in both executive and non-executive directors on the boards of companies in the UK is particularly welcome. In today’s corporate environment there is increasing demand for openness, transparency and participation on boards. As well as adherence to the corporate governance code this requires boards to have different views, different perspectives and different ideas.
The benefits of diversity
In his review Derek Higgsi invited companies to ‘comply or explain’; what the corporate world should not do is complain. The voluntary code in the UK offers companies guidance and avoids the inflexibility and cost of over-prescription. This does much to make board composition and decision-making transparent, although shareholder confidence is eroded with each new corporate governance scandal. Regulation limits the freedom of boards and executive managers to invest and innovate, which in turn stifles the potential for wealth creation.
See full Article, in pdf format.
Posts
