Balanced Boards

BalanceMuch has been written of late on the need to have diversity on our listed company Boards, with one of the key focus areas being that of female representation and whether quotas are the best way to go. There are pros and cons for each particular approach but whatever the approach taken, the outcome needs to be a balanced Board.

What makes a balanced board? There are a range of characteristics that will truly “balance” a Board:

  • Skills Diversity– this is probably the main area that’s been given a lot of attention over the years and therefore most organisations are getting right. Traditionally, organisations have the core competencies, such as accounting, legal and commercial skills well represented. We are now seeing Boards seeking to add HR and technology governance skills, to ensure elements such as the culture of the organisation, and digital strategies are well governed.
  • Gender Diversity– getting input from both dominant sides of the brain and a range of (widely) different experiences and prisms. Women and men think totally differently on a wide range of issues and getting this breadth of opinion can only make for better governance and more relevant outcomes for the organisation.
  • Cultural Diversity– how many of our Boards have strong trading links with Asian economies, yet do not have either an Australian of the dominant culture on the Board or a local who can tap into the latest trends and thinking in their market? Let’s not restrict ourselves to just one person.
  • Age Diversity– we have long compared the idiosyncrasies of Baby Boomers vs. Gen X and Gen Y but do we have these views represented around our Boardroom table?
  • Social Diversity– even if it makes us a little uncomfortable, getting views from a wide range of social, political and socio-economic perspectives can only enhance the outcome.
  • Diversity of Opinion – and a willingness to challenge the status quo in a positive and constructive manner. Far from having Boards that are “of the same mind” organisations need Directors who challenge the accepted norms and ensure that complacency is substituted by robust debate, and acceptance is replaced by challenge.

Many people will argue that this kind of input can be divisive and in some cases can be garnered from research without the need for representation around the Boardroom table, but wouldn’t it be better having people who understand and support the strategic imperatives of the business from an intimate perspective, who can then overlay their particular contribution for the best long term outcome of the business.

There is no doubt there are a range of Boards that already have gone a long way to addressing these challenges, but there is still a long way to go for many. Boards who embrace the challenges and actively seek broad and potentially uncomfortable solutions will no doubt gain the rewards.  We have come so far in the last 25-30 years and it is time to take the next leap of faith.

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