Thursday, 27 February 2014

P1 wider reading: boardroom diversity

Diversity in the boardroom is a topic that is relevant both to your P1 studies and, of course, to the wider corporate world. The P1 syllabus asks students to contemplate the value of a diversified board and also to keep diversity in mind when it comes to board member nominations. Diversity can refer to many things – diversity of race, age, sexual orientation, religion – but inarguably the most discussed issue in corporate governance diversity is gender. In short, there is a push to get more women in the boardroom. Some jurisdictions (particularly in continental Europe) have gone as far as imposing quotas and targets percentages of women in executive and non-executive positions. Opponents to such quotas are those who believe the most senior positions should be reserved for the most qualified personnel, and they suggest that unfortunately a historical lack of women in the management pipeline means that there are fewer eligible female candidates for these positions. 

Wider reading
This is a topic worth reading around, not least because there is an ACCA examiner’s article on the topic. This should indicate to you that the topic is a highly examinable one. That article, of course, should be the starting point for wider reading. Further reading comes from a couple of articles published by The New Yorker, the first of which examines board diversity quotas in Germany and the second of which looks at the lack of diversity in Twitter and other tech firms’ boards. The first linked article in particular looks at the controversial claim that board diversity might improve corporate performance. Be sure to read this in concert with the section in the examiner’s article on the costs of diversity.

The Economist has also published relevant articles in the past few years, one of which also deals with diversity in Germany, and another two that examine women in business.
  
Both articles on Germany are also relevant when it comes to P1’s focus on varying board structures, namely the two-tier board system that is popular in Europe.

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