Quick Question: Will you be looking to further diversify your board in 2022?

In association with The Core Partnership, this month’s Quick Question looks at diversity on boards, both in terms of representation and skillsets.

Will you be looking to further diversify your board in 2022?

Do you feel there is a lack of diverse skills in your boardroom?

In our first survey of 2022, we are looking at diversity on boards, both in terms of representation and skillsets. We asked about plans to increase the range of skills on boards and the kinds of people you’re looking to attract to meet company needs.

Skills-based hiring can unlock access to a previously overlooked pool of talent and can assist with the wider diversification aim, but you will need to make sure you have the appropriate culture to fully accommodate new blood.

Our first question looked at how well the board represents stakeholders (on a scale of 1–10). We received a positive score of 6.5, highlighting a good and growing understanding of your customer base.

Looking ahead, we asked respondents about plans to further diversify their board in 2022; more than half (53%) said that they were planning to, with 28% responding that they were unsure and 19% saying they didn’t have plans in this regard. It is positive to see the majority planning to diversify as a key characteristic of a good board is that it keeps its finger on the pulse. Whether board members are replaced or consultants/non-executive directors brought in, evidence from the Financial Reporting Council shows that efforts to diversify boards result in better corporate culture and performance.

We then asked about the comprehensiveness of processes for making changes to the composition of the board. It was encouraging to see that 33% replied that their processes are ‘very clear’ with 39% saying they were ‘good’. Of the remaining respondents, 25% reported that their processes ‘need improving’ and only 3% said they have a ‘lack of process’.

While diversity is generally regarded as a positive thing, we wanted to sense check how a focus on diversity had affected board composition to make sure it wasn’t just a box-ticking exercise. Fortunately, the majority of respondents (55%) said that diversity had ‘improved board composition’, with 44% reporting ‘no change’ and just 1% saying it had a ‘negative impact’.

Looking at the skillsets of boards, we wanted to find out about the diversity of skillsets in boardrooms. Most respondents (57%) indicated no lack of diversity in relation to skills, however, 35% thought there was a lack and 8% were unsure. In follow up, we investigated what skills people are looking to attract into their boardroom going forward. Free-text replies provided a wide range of answers covering areas such as ESG, cybersecurity, a younger dynamic and sector-specific skills. Having grouped the answers, it was interesting to see that 35% of the replies fell into the category of ‘digital skills’ and 21% were in the area of ‘people diversity’ with diversification in terms of age, socio-economic background, ethnicity and gender all being mentioned quite commonly. 13% said they were looking for ‘industry-specific skills’ with 6% looking to strengthen in the area of ‘strategy and management skills’. Although they were raised by fewer respondents, ‘social and people’ skills, ‘customer focus and marketing’ and ‘risk’ were all also mentioned as possible sets of expertise that could benefit boards.

If you are a company secretary or governance professional at a leading UK business and you would like to take part in or comment on future surveys email team@core-partnership.co.uk.

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