Wednesday 21 August 2019

Boardroom 'boys clubs' must be more diverse - report

IoD CEO Maura Quinn
IoD CEO Maura Quinn

Shawn Pogatchnik

IRELAND'S boardrooms must do more to challenge practices that limit roles for women and minorities, an Institute of Directors (IoD) survey has found.

The IoD surveyed 381 business leaders for its 'Diversity in Ireland's Boardrooms 2019' report. Participants made up of 84pc board directors and 40pc women answered questions on gender, age, ethnicity and race. Their views were compared with results from a similar 2017 survey.

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The results identify rising support for appointing female and non-white board members but also documents ingrained practices that often undercut the goal.

Some 43pc said their boards value diversity, up 10 points from 2017, while 24pc said they did not.

Men and women differed on the main reasons why most board members are male. For men, the most common reason cited was the lack of "suitably qualified women", while women cited unconscious bias and less access to male-dominated networks as key factors.

When asked how they won their own board appointment, 34pc said they were directly approached by the board or a member and 16pc indirectly via third parties, while just 12pc went through an independent recruitment process - down from 19pc in 2017.

The survey found most have held their seats for at least five years, a quarter for a decade or more. Only half of boards rotate posts.

IoD chief executive Maura Quinn said these practices reinforce "the perception that board appointments are about who you know," and of boards being a "boys' club".

"Resignation and retirement are still the main reasons for boardroom changes. This lack of planned processes around succession planning militates against effective board diversity for good governance," Ms Quinn said.

Rotating posts as part of "best-practice board tenure terms" and recruiting independently "should negate such claims and lead to increased diversity," she said.

The report found boards in Ireland remain 97pc white, unchanged from 2017.

While 55pc of those surveyed said racial diversity was important when recruiting board members, the report offered few specifics on how this might change.

It quoted one respondent's view that "there is not yet enough ethnic diversity in Ireland" to challenge this.

The report found that Irish boards tended to be "Leinster-centric," with respondents predominantly from similar Dublin secondary and university backgrounds.

"Overall, this homogeneity heightens the risk of group-think and fewer dynamic and challenging board outcomes," the report warned.

Irish Independent

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