Human Resources



Diversity lacking in boardrooms today

Two in five board appointments are made without any formal process

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A total of 40% of board appointments are made without any formal process, and more than half go to candidates already known to the organisation. This is despite almost two-thirds of boards prioritising widening the skill sets of board members, according to the Harvey Nash Board Report 2016/17 in association with London Business School’s Leadership Institute.

The research, representing the views of more than 650 non-executive directors from Asia Pacific, UK and the Nordics, also finds that just over a quarter (26%) of respondents have never undergone an external board evaluation. In Asia, that number rises to 45%.

Diversity and inclusion is a far thought at this rate, with only 29% of respondents creating succession plans focused on populating the board talent pipeline with a richer mix of backgrounds and experience.

Key survey findings:

  • 63% of boards are actively pursuing more diverse functional expertise
  • 48% of boards are actively pursuing gender diversity
  • Other areas of diversity actively pursued by boards: International expertise 37% | Age 24% | Ethnicity 23% | Culture 21% | Academic background 14% | Social background  5% | Lesbian, Gay, Bisexual and Transgender 3%

Specifically in Asia Pacific, the diversity of thought and effectiveness of boards is affected by the form of company ownership and the usage of personal networks over external talent pools.

Unlike other regions, APAC respondents were the most likely to be discussing current financial performance and managing shareholder expectations in the boardroom. They were one of the regions least concerned with corporate reputation and brand; ‘mergers and acquisitions’ were also low on the agenda.

ALSO READ: Why is gender diversity in leadership still a huge issue for Singapore?

When it comes to the types of diversity that are desirable, the APAC respondents are less likely to seek either gender diversity or functional expertise than their UK or Nordic counterparts. They place a higher weight on diversity through cultural and academic backgrounds.

When it comes to measuring the effectiveness of the board, APAC respondents were by far the least likely to have never had a formal board evaluation (46% vs 26% of all regions).

Despite being the region least satisfied with the available talent pool, two-thirds of APAC boards are appointing new non-executives that are already known to the board. Furthermore, they were significantly less likely to use a formal assessment process when appointing these members.

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