FRC: Diverse boards improve performance

The UK’s Financial Reporting Council’s (FRC) highlights how diverse boards improve performance and company culture in its latest research Board Diversity and Effectiveness in FTSE 350 Companies.


The research, which was published in conjunction with London Business School Leadership Institute and SQW (a research provider on social and economic development), said that to maximise benefits boards should recognise that changes take time and diversity without active inclusion is unlikely to encourage new talent to the board.


The main findings of the research concluded that:

  • It is the responsibility of the chair of the board to drive inclusion.

  • Regulators and companies must focus on collecting more data on the types of diversity, board dynamics and social inclusion

  • the Nomination Committee itself should be diverse and have a clear mandate to work with search firms that access talent from wide and diverse pools.

  • The greater representation of women in the boardroom is reshaping culture and dynamics and benefiting businesses from a social justice as well as a performance perspective


Read more at the International Accounting Bulletin here