The stereotypical white male middle-class board ill serves most companies at a time when nearly all significant businesses face intense competition. Market forces are encouraging chairmen to take a critical look at the profiles around the table.
Both commercial and public organisations are under fierce pressure to deliver value. For commercial enterprises, this is profit and profitability; in the public sector, it is the efficient and effective delivery of universal services.
Correctness derided
The emphasis on diversity in the Higgs corporate governance code two years ago stimulated a fresh focus on the composition of commercial boards.The public sector has shown the way. Though political correctness is frequently derided, government has led the commercial world in placing qualified people from diverse backgrounds into leadership roles.
Are boards changing for the better? The evidence is only moderately encouraging. Too many boards remain staffed by men of similar education, career paths and social tribe. An effective board must understand and respond to the markets it serves. A monoculture tends to look inwards and fails to test its own assumptions. Better to look out of the window than in the mirror.
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