Saturday, November 22, 2008

Diversity, boards and the financial crisis

While the public and third sectors are (rightly) keen to become businesslike, it is worth noting that they can sometimes be ahead of the private sector. Diversity on boards is one area. For example, a third of FE college governors are women. Colleges and housing associations have been addressing the issue of having boards that have people from a mix of backgrounds. (Of course, they can do better.)

This week a report from Cranfield University School of Management found progress – albeit slow - in women getting onto corporate boards.

One of the authors made an interesting argument for more diverse boards: "We might not be in quite such a dire situation if there had been more females on the boards of banks. The evidence is that women are not more risk averse, but they are more risk aware."

More diverse boards were "less likely to fall into group-think or to accept the status quo," Ruth Sealy commented. "Decisions can take longer to reach, but they will be better."


Rob Greenland said...

Interesting post Bob. I'm sure I read somewhere that one of the opportunities that is coming out of the crisis in Iceland is that there's a real push to get more women into senior positions and onto Boards. Diversity no doubt leads to better decision making.

But it's not just about women. I'd suggest it's also about changing Boards so that they attract a wider range of people - different men as well. Big generalisation coming up - but too many Boards lend themselves to the kind of man who likes the sound of his own voice. Those of us who believe in the value of listening, reflection, consensus building etc don't tend to get a look in in the way that many Boards operate.

Bob Deed said...

Yes - there was an article in Management Today about women cleaning up the mess in Icelandic finance

I agree with your comment about the need for a mix of people types on boards.

I've just been profiled for my "team working" along with the Chair and Chief Exec at the housing association that I am on the board of. It was an interesting and useful exercise. I am now keen that we consider using team working profiling when recruiting new board members so we have a better balanced board.