A recent report shows a 'worrying' lack of planning for role renewal in Ireland's boardrooms.
Diversity in the Boardroom 2019, a study by the Institute of Directors in Ireland (IoD), has shown that despite a rising support for gender targets, firms are not planning for board diversity.
The report, looking at gender, age, educational background, geographical location and race, was compared the 2019 results with a similar IoD report on board diversity in 2017.
Less than one in 10 board directors surveyed were hired following an independent recruitment process. Instead, 50% of respondents claimed to have been chosen directly for the role by a board member, with men more likely to have been approached by a connection than women.
Maura Quinn, chief executive of the IoD in Ireland told the Irish Times: “There is an overwhelming recognition that board diversity in all its forms leads to enhanced board effectiveness and company performance.
“Yet, on closer examination, [there is] a worrying finding when it comes to the appointment of board members, with almost half of respondents saying their board does not have a rotation system in place for board tenure.
“Resignation and retirement are still the main reasons for boardroom changes. This lack of planned processes around succession planning militates against effective board diversity for good governance.”
The research shows that 25% of board members have been in role for 10 years or more, with 53% in role for five years or more.
"This statistic shows that the push for progress is slow, and that perhaps cronyism or nepotism blinds board members to the merits of those with different backgrounds or views", said Lucy Cottle, Producer of Women in Finance Dublin.
The report also shows more support for gender targets over gender quotas. 83% of the respondents somewhat agree or strongly agree that board diversity leads to enhanced board effectiveness and 77% believe that board diversity leads to enhanced company performance.
"The quota versus target debate is a hotly contested one in the world of diversity and inclusion," said Cottle, "many people are opposed to quotas since they fear that it will be seen as tokenistic; that less capable people will be selected and promoted, or the recruitment process will lack transparency.
"To my mind, it is all to do with the pace of change. Targets (which don’t have to be achieved) will not put any pressure on those at the top to hit the target whereas quotas speed things up. There is no reason why quotas can’t be exceeded as well."
She lists the benefits of having quotas in place: "Firstly, the decision-making process improves with greater diversity of thought on boards. Furthermore, having female top executives may have positive effects on the career development of women at lower levels of an organisation.
"Clearly, the outcomes of this report published by the Institute of Directors show that along with efforts to educate, communicate, change culture and stereotypes, quotas and targets are a must to increase the number of women at board level."
On 12-13 September 2019, financial leaders from Ireland will discuss these issues at Women in Finance Dublin. With speakers from Paypal, Google, Barclays, as well as government officials, join the conversation in two days of talks, skill-building workshops and dedicated networking opportunities. Get your tickets here.