BOARD Flashcards
(24 cards)
3 types of boardroom diversity
social, skills stakeholder
social diversity includes
gender, ethnicity, social background, age and disability
Gender diversity UK
Lord Davies 2011 all FTSE 100 companies aim to have 25% females by 2015
Gender diversity EU
introduce quotas, e.g. Norway 40% must be female
Gender diversity research
shows companies with more females outperform those with mainly males
Gender diversity adv
reduce aggressive behaviour of all male board and consider issues more objectively
Gender diversity disadv
takes longer to come to a decision
Age Diversity Guidelines
general 18-70, but these aren’t legal requirements
Age diversity upper limit
older people may find it harder to keep up with technology or new standards
Age diversity lower limit
dont have real life experience about running a business or ability to make large decisions
Social diversity disadv
it wont lead to correct decisions being made itself, must also have a range of skills on the board too
skills diversity
refers to board members having a broad array of skills, qualifications and competences
stakeholder diversity
stakeholders refer to representation on the board, such as supplier, customer, shareholder or employees
stakeholder diversity EU
more common in the EU where theres 2 tier boards w/ supervisory board full of stakeholders
stakeholder diversity Theresa May
attempted to get employee representative on board, however it’s a conflict of interest to have 1 person from each stakeholder on board
UK corporate governance code on boards
attempts to widen the pool of applicants as its seen that applicants come from a narrow pool
Tyson Report 2003
states boards should be drawn from a wider pool of applicants and not just networks of similarly minded people
EDs and NEDs in UK
board should consist of majority of NEDs, they should be independent
EDs and NEDs in practice
can be difficult to have INEDs, its argued the longer a NED remains on the board, the less independent
Size of a board
8-10 members, any smaller, not enough skills. any larger, hard to reach a decision
Tenure of a board
NED should serve no more than 9 years. Chairs must add NED and chair years. (unless a quota is being filled e..g female on board)
Discussion within board meetings
have a frank and open discussion about matter and issues on their board meeting agendas
Directors role in board meetings
not there to rubber stamp the decisions of the CEO
NEDs on boards
are meant to constructively challenge the decisions of EDs
