Knowledge Center: Publication
Chief Executive Officer & Board of Directors
Building an effective and diverse board: Lessons from AsiaSubscribe to Chief Executive Officer & Board of Directors 4/25/2016 Alain Deniau and Harry O'Neill
The diversity challenge
Diversity is crucial to creating more effective boards and improving corporate performance, yet boards in the Asia Pacific region tend to be less diverse than boards elsewhere—a legacy, in part, of the region’s long history of family-owned businesses.
Solving the diversity challenge requires concerted effort. To get there, boards should:
- Start by taking a hard look at how their roles and objectives are evolving beyond the core job of protecting the financial interest of shareholders.
- Recognize that a smart board composition may require true “alternative thinkers” who can hypothesize the “what ifs” of the future.
- Understand that a newly diverse board will operate with new dynamics (brought about, for example, by the addition of “outside the box” thinkers) and thus require careful management to ensure a strong board culture.
Putting diversity into action
One global consumer-products company we studied is increasing its diversity under the guidance of a strong board chair who has made board diversity a priority. Notably, he is clear in his communications (internal and external) that the board’s desire for greater diversity does not stem from a knee-jerk reaction or quota system, but from a need to have the board match the mix of nationalities, age groups, gender, and cultural backgrounds of its increasingly global customers.
The organization’s culture also plays a role. “Our culture and DNA drive an emotional connection with our customers, and that’s what has made us successful and got us to where we are today. And we can’t forget that,” the chairman of the consumer-products company notes. “Diversity is important, but it should not affect our existing culture but rather strengthen it. Building a diverse board should lead to a diverse ex-co team. Step by step, this diversity mind-set promoted at the top will cascade down to the organizational level.”
Although still in the early days of implementation, the results are promising:
- More challenging questions are being asked at board meetings.
- Board meetings are more dynamic and energetic, and boards are smaller.
- More ongoing contact among board members happens outside of scheduled meetings.
About the authors
Alain Deniau (firstname.lastname@example.org) is a partner in Heidrick & Struggles' Hong Kong office and a member of the CEO & Board Practice.
Robert Knight (email@example.com) is a partner in the Hong Kong office; he leads the Insurance Sector for the Asia Pacific region.
Harry O’Neill (firstname.lastname@example.org) is a partner in Heidrick & Struggles and leads the CEO & Board Practice for the Hong Kong office.
For the full report, click the download link above.