'Diversity of thought' highly important when hiring boardroom talent
Gabriella Jozwiak, February 27, 2014
HR directors hiring boardroom talent should ensure 'diversity of thought' is among the most important within a list of six aims, a report has suggested.
The opinions of more than 230 senior board members and data from the top 400 publicly listed companies across 15 European countries were used by global executive search firm Heidrick & Struggles to compile the results.
The study identified six characteristics of dynamic governance each board should develop, with ‘diversity of thought’ named as highly important by respondees, alongside ‘strategic alignment’.
Some 97% of those surveyed said having the right balance of skills, knowledge and experience to constructively challenge senior management was important for board effectiveness. Fewer, 82%, were satisfied they met this aim.
In contrast, only 63% said having a diverse gender and nationality mix on the board was important, while 71% said they were satisfied with their achievements in this area.
In the case of strategic alignment, 97% of respondees said it was important each board member understood a clear strategy. Fewer, 83%, believed they achieved this aim.
Another highly-scoring characteristic was adaptability. A total 94% of those surveyed said it was important for the board to consider the acceptance of appropriate risks. Of these, 81% said they achieved this ambition.
In the area of diversity, the research revealed that UK gender quotas or targets for women were among the lowest of the counties surveyed. The target of having 25% of women on boards by 2015 was higher only than Italy, which has a 20% target. The report suggested the current rate of women on boards in the UK is 18%.
According to the report, only 10% of board positions in the UK are filled by non-native directors – far lower than in the US where the proportion is 24%.
Heidrick & Struggles managing partner Will Moynahan said having diversity of thought in the boardroom would strengthen boards and lead to “better-owned compliance”.
“You need to have that diversity of thought in the boardroom, which is not just around gender, it’s around ethnicity, skill-set, age, generational, international, cultural and functionally as well as sector diversity too,” he said.
Moynahan also stressed that having the capacity to adapt was a key characteristic for HR directors to pursue in their appointments.
“Board members really need to come up with new ideas, whether it’s the digital economy, cyber security – whatever the risks are facing the business,” he said.
“The world we live in moves really fast, so does technology, people and most economies, so we feel that capacity to adapt in leaders and board directors is another one that’s very strong in the report.”
Heidrick & Struggles manager of CEO and board practice EMEA Alexa Bailey said company had sent the report to group HRDs as well as FTSE CEOs, chairmen and senior non-exec directors because “group HRDs are starting to have more of a voice in the boardroom”.
“It’s really important to have that transparency and have a really good, robust process when it comes to recruiting board directors so HRDs are being brought more into the fold for that,” she said.
She added that many HRDs who had themselves been appointed as non-exec directors would also benefit from the characteristics defined by the report.
The full list of characteristics named in the report were: deep business knowledge, diversity of thought, engaged leadership, strategic alignment and execution, capacity to adapt and leadership talent.