Introduction

Governance professionals discuss the information their companies are releasing and how they are seeking greater diversity

Introduction

Diversity in the boardroom – or lack thereof – has attracted attention in recent times, but that attention has intensified over the past year or so. The focus comes amid greater scrutiny of both board performance and diversity, equity and inclusion matters following the Covid-19 pandemic and protests over racial injustice. Regulatory developments are also pushing companies to think about how they approach board diversity.Governance professionals may be involved in a number of ways, such as working with their board to determine which details of its composition will be reported and how that disclosure will be made. There is growing appetite for information about the make-up of boards not only in terms of gender, race and sexual orientation but also across characteristics such as age, skills and experience.Board diversity is an issue that can be raised during investor engagement or at company AGMs, too. Ultimately, decisions regarding board recruitment, renewal and succession planning are key, and all of these require involvement from both governance teams and directors.In this special report we present data based on a survey conducted among governance professionals such as general counsel and corporate secretaries. They explain what types of board diversity information their companies report on and whether investors are asking questions about the topic. They also share their views on whether board diversity brings benefits and whether they are trying to enhance diversity on their board.Key findings

Almost half (48 percent) of respondents say their company does not disclose the racial composition of the board and almost a fifth (18 percent) don’t disclose its gender composition.

Respondents at larger companies are more likely to use a matrix to present board diversity information: 20 percent of those at small-cap companies do so, compared with almost half (48 percent) of those at mega-cap companies.

Respondents at larger companies are also more likely to have investors that ask about board diversity. Only around a fifth (22 percent) of respondents at small-cap companies say investors raise the subject, compared with almost three quarters (71 percent) of those at mega-cap companies.

Almost nine in 10 respondents (86 percent) say board diversity helps create better board performance.

More than three quarters (77 percent) of respondents say they believe board diversity helps lead to better corporate performance.

Overall, almost three quarters (73 percent) of respondents say their company is taking action to increase diversity on its board.