TORONTO, Feb. 6, 2013 /CNW/ - The Global Network of Director Institutes (GNDI) has today released their joint policy perspective, setting out the significant and positive impact a diverse board can have on business outcomes and arguing that mandatory quotas is not the most effective way to improve board diversity.
At the release of the GNDI policy paper, Chair of GNDI and CEO of the Australian Institute of Company Directors, John Colvin, said that the paper highlights that improvements to board diversity should be driven by recognition of the benefits of diversity.
"Board diversity is an important governance issue but is a means to an end, not an end in itself," said John Colvin.
"If all individual directors on a board view issues in a similar way, there is a risk that the board will approach issues too narrowly, suffer from "group think" or fail to adequately consider and evaluate alternative ideas or options in relation to the organisation."The paper emphasises that diversity encompasses, but is not limited to, gender, ethnicity/race, nationality, religious beliefs, cultural or socio-economic background, and age. It reflects a clear view from the director institutes of the GNDI that because systems of organisational governance vary significantly around the world, the approach that each organisation takes to diversity will vary; all organisations are different and there is no "one size fits all" formula. Initiatives and practices which may be employed by organisations to increase the diversity of their boards could include establishing diversity policies and objectives, improving transparency in board selection and appointment processes, and implementing board evaluation processes that assess the board's performance and the potential contribution of diversity to board effectiveness. "The GNDI Policy Paper echoes what our membership has been telling us for several years that diversity is an important governance and organisational issue. It needs to be adopted and implemented from the board-level down to be truly effective," said Stan Magidson, Deputy Chairman of GNDI and President and CEO of the Institute of Corporate Directors. In December 2011, the Institute of Corporate Directors (ICD) issued a position paper on Diversity in the Boardroom which called for boards to adopt formal diversity policies. The position paper was issued following a year-long consultative process with its membership. "In speaking with our membership across the country an overwhelming majority are strongly opposed to government-imposed quotas. Only 4 per cent favoured such measures," Mr. Magidson said.