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Path to Board Diversity Still Encountering Hurdles

Despite gains in board diversity representation over the past two years, about a third of diverse directors still say they encounter challenges in having their voices heard during board discussions, according to a recent KPMG study. The report, which surveyed 111 directors in the US and over 700 directors globally, found the following was true in the US:

  • Although almost 60% of directors said they are not concerned at all that a lack of diverse views in the boardroom hampers performance, almost all said that they view board diversity (both composition and thinking) as relevant to the company’s consideration of its role in society.

  • Meanwhile, about a third of diverse directors said they still face challenges, such as other board members dominating the discussion (22%), discounting their opinions (12%) failing to encourage all voices be heard (10%) or even taking credit for their insights (9%).

  • Interestingly, about 30% of directors still claim that lack of qualified diverse board candidates is the primary impediment to board diversity. Since 42% of directors also said that C-suite experience is the most important criterion when recruiting new board members, there seems to be a gap – if C-suite experience is required, then the pool of qualified diverse candidates will be smaller than it could otherwise be. As many companies have learned, reaching outside the C-suite can broaden the candidate pool and bring in talented directors that might otherwise have been excluded.

    • More than half of directors rated HR experience as #2 or #3 on the list, reflecting increased demand for board members who understand human capital concerns.

The report also includes an appendix of global results which have some interesting findings. For example, directors in the UK are much more likely to say that boards lack diversity because of lack of qualified candidates, and less likely to agree that it’s because the CEO/board recruit from a narrow social and business circle. However, UK directors are also the most likely (85%) to say that constructive criticism is encouraged or that directors freely question the information presented to the board, highlighting cultural differences that may come into play when you are dealing with a board outside the US.

Published on: August 12, 2022

Authors: Ani Huang

Topics: Compensation Committee and Board, ESG and Diversity & Inclusion

Ani Huang

President and CEO, Center On Executive Compensation

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Contact Ani Huang LinkedIn

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