Time for Fresh Thinking on Diversity

The Cranfield Female FTSE board report published this week - the annual benchmarking report and update to Lord Davies about the number of women on boards - should give chief executives, chairmen and executive search firms pause for thought.

The Cranfield Female FTSE board report published this week - the annual benchmarking report and update to Lord Davies about the number of women on boards - should give chief executives, chairmen and executive search firms pause for thought.

Not only because the drive to increase the proportion of women representing the top echelons of business is so painfully slow, but because we need to take a step back and view the diversity of Britain's boardrooms through a much wider lens.

There is a plethora of evidence to demonstrate that having a critical mass of women on boards improves financial performance, and this is undoubtedly a pressing concern which needs addressing. It is a debate that businesses across the UK, within the FTSE and beyond, must address with urgency before the unhelpful blunt instrument of quotas is wielded.

However, the definition of diversity must go beyond gender - and beyond ethnicity (something which is much less frequently and vociferously discussed) - to encompass inter-generational cohesion, international experience and working culture. Our boardrooms should not all look the same, as if cloned from the DNA of those who went before, or be so similar of viewpoint and experience that they are at risk of groupthink.

If boards are to govern risk and avoid reputational disasters effectively, they need to be curious, ask the difficult questions and challenge information that is being presented to them. Diversity of outlook and skill-sets is one of the crucial elements of ensuring that this happens - we must recruit a group of individuals who benefit from a broad range of experience and mind-sets, to ensure key business decisions are approached rigorously, from different points of view.

The key question is how to shift the dial, and - and this is underlined by the slow progress of women on boards, two years on from Lord Davies' report - how to do it quickly.

So long as the issue of diversity is approached from a 'tick box' point of view, it will not be taken seriously enough at the highest levels.

What does not get measured does not get done. Every director should make a commitment to fostering a broad pool of talent as part of his or her KPIs. For example, at CIMA, we have adopted the principle of 'act globally, think locally', establishing Regional Directors across the world and devolving responsibility from the top down.

Organisations need to devise appropriate metrics for measurement - systems to interpret data and create a plan for improving diversity within the business. Recruitment processes need to be much more transparent and positive steps towards strengthening and developing diverse talent should be taken - such as networking and mentoring programmes and cross-functional and flexible working.

And finally, chairmen and executive search firms should be challenged to cast the net wider and not continue to recruit in the same model.

If businesses can affect positive change, and be represented by a truly diverse board of directors, they will be more able to compete in the global market place and successfully plan for a long-term, sustainable future.

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