EDITORIAL: BROADENING REPRESENTATION ON BOARDS

To take a closer look at what inclusion means in boardrooms today, Egon Zehnder surveyed 450 directors globally (44% from EMEA, 29% from the US 16% from APAC, 11% from the rest of the Americas), the majority of whom are experienced, independent directors who serve on two or more boards. Egon Zehnder asked them a series of questions about the desirability and effectiveness of diversified representation and inclusion on boards. The overwhelming majority of the respondents underscored these as important current business practices: The findings are clear: there is no question that boards are committed to broadening representation and enhancing inclusion as core elements of their culture and decision-making processes.

• 94% of board directors say embracing different viewpoints is a strategic priority for their boards

• 90% agree it leads to better decision-making

This is especially striking given the environment boards are operating in today. Complex challenges from geopolitics to AI, to cybersecurity to sustainability are changing the demands and pressures on boards. New topics vie for attention on the agendas, whilst board members are also expected to engage more deeply in strategy, investments and M&A, performance management, risk, and talent.

To bring more perspectives into the boardroom, most boards in the survey have broadened the range of director representation and are including younger directors, functional leaders, outside industry executives, and directors from under-represented ethnicity, race, or gender. Perhaps unsurprisingly, several respondents underscored the need for more IT/technology representation at this moment in time.

Board members say that the main challenges in increasing representation have been creating space on the board and finding directors with the right level of experience. Several respondents expressed frustration about a narrow pool of talent and others say that many candidates who meet the experience requirements are over-boarded.

In addition, a wider array of voices on the board means extra attention needs to be devoted to board dynamics and culture to ensure inclusion of all perspectives. Egon Zehnder asked their respondents questions about where they are on this journey and found another consensus: 97% of directors say that all perspectives are heard on their boards and are making adjustments accordingly when they’re not. Board members also say they value healthy disagreement over uniformity.

To read the full report, click here.