The ability to construct a performing Board that will contribute and add value to the company is limited by the sum and diversity of the individual directors’ competencies. The level of subsequent performance of the team of Directors sitting around the table flows from the leadership of the Chairman
Much has been written in recent times about the need to introduce or strengthen the diversity of the membership and thus the composition of Boards of Directors. In most countries, this is typically seen as referring to female members of the Board or perhaps non-headquarter country residents. In the USA, board diversity is now measured and is typically defined as the percentage of women, African Americans, Asians, or Hispanics on the Board of Directors. Recent studies in the USA based on this definition suggest that there is a link between Board diversity so defined and improved financial value, although the researchers note that the causality has yet to be confirmed.
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