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.
The ICD is a strong supporter of diversity and, in particular, the enhanced participation of women in the boardroom. A partner of Women On Board (WOB), the ICD sponsors one diverse candidate each year in the WOB Mentorship Program, which prepares mentees to serve on boards and expand their board network.
In addition, the ICD offers Diversity Scholarships for its flagship Directors Education Program (DEP), jointly developed by Rotman and the ICD. Launched in 2011, the scholarships are granted to 11 qualified candidates from diverse backgrounds with a financial need allowing them an opportunity to participate in the DEP.
The Global Network of Director Institutes (GNDI) was founded in 2012. It brings together member-based director associations from around the world with the aim of furthering good corporate governance. It is an international network among nine leading membership organisations for corporate directors in Australia, Brazil, Canada, Europe, Malaysia, New Zealand, South Africa, the United Kingdom, and the United States. The following membership organisations are members of GNDI and collectively represent more than 100,000 corporate directors worldwide:
- Australian Institute of Company Directors (AICD)
- Brazilian Institute of Corporate Governance (IBGC) in Brazil
- European Confederation of Directors Associations (ecoDa)
- Institute of Corporate Directors (ICD) in Canada
- Institute of Directors in New Zealand (IoDNZ)
- Institute of Directors in Southern Africa (IoDSA)
- Institute of Directors (IoD) in the United Kingdom
- Malaysian Alliance of Corporate Directors (MACD), and
- National Association of Corporate Directors (NACD) in the United States.
Read the GNDI policy perspective paper at www.gndi.org/papers
About the ICD
The Institute of Corporate Directors (ICD) is a not-for-profit, member-based association representing Canadian directors and boards across the for-profit, not-for-profit, and government sectors. The ICD has more than 6,500 members across a network of 11 chapters. We foster the sharing of knowledge and wisdom through education, professional development programs and services, and thought leadership and advocacy to achieve the highest standard of directorship. For more information, please visit: www.icd.ca.
SOURCE Institute of Corporate Directors (ICD)