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Research Finds That UK Boards Lack as Much Diversity as Their US Counterparts

According to new research co-sponsored by KPMG, UK companies are lagging behind their US counterparts in terms of professional and sector diversity.

The study was undertaken by Oxford Brookes University’s Centre for Diversity Policy Research and Practice, and examined the different range of backgrounds on boards within both of the countries, and it particularly looked at the exchange of board level personnel between the business and academic environment.

The findings showed that academic non executive directors (NEDs) in the US communicate with government, businesses and other organisations far more than those in the UK.

In contrast to the 59 academic directors on Fortune 100 boards in the US, only 8 academic NEDs were found to be on the boards of FTSE 100 companies.

This led to the conclusion that British businesses and not galvanising the copious talent in higher education.

Melanie Richards, vice chair at KPMG in the UK, said, “We need to move the diversity debate on from focusing solely on gender and better reap the benefits of having a mix of professional and sector backgrounds on UK company boards.”

UK executives argued however that if academics are placed on corporate boards then intellectual, rather than corporate terms and that this might restrict profits. They nevertheless conceded that talent from the academic community could be invaluable if incorporated seamlessly.

“There seems to be a degree of caution from corporates that bringing senior academics into the boardroom may result in longer deliberations for certain issues. However, by bringing together a more diversified group, business may benefit from more thoughtful discussions, which should strengthen the quality of decision making and outcomes,” Richards said.

The research also looked at the amount of female transition from business to university boards, as opposed to female academics entering the boardroom. It was found that the amount of women entering the corporate sector from academia was much lower than vice-versa.

Tellingly, less than 2% of female NEDs in the FTSE 100 index hail from academic backgrounds.

The research also found that higher education is more gender diverse than business, with women holding almost 40% of university boardroom roles.

It has been argued that cross-sector mobility is important as a way to bridge gender diversity gaps on boards, and that if senior female academics could be integrated into corporate roles this would be extremely beneficial for diversity.

“It is clear that academia remains a largely untapped talent pool for UK plc and there is much work to be done to promote mobility in both directions. Businesses need to open their eyes to the advantages of a more diversified board and the capabilities that senior academics, both male and female, can bring,” Richards added.

Anne Richards and Elizabeth Passey, co-chairs of the 30% Club Higher Education Working Group, who commissioned the research, said, “From our own experience, we know business leaders and senior academics gain a huge amount personally from collaborating with each other: the evidence in this new report shows how UK employers also have a great deal to gain from achieving more professional diversity on their boards, whether those of companies or academic institutions.”

 

Written By:

Daniel James
www.danieljamesbio.com
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