INCAE participates in a global study on the Composition and Diversity of Boards of Directors in the world
Costa Rica. September 20, 2022. INCAE was invited to participate in the Global Modern Leadership Report led by Diligent in collaboration with 22 partner organizations around the world. The research represents the first global analysis of boardroom diversity and provides a unique holistic view into the progression of inclusion in public and private boards around the world.
The study was conducted based on a questionnaire with 28 questions answered by members of Boards of Directors that are part of the database of presidents and directors of INCAE. Responses were obtained from 218 boards made up of 1.073 directors.
The results were similar among all the regions, showing opportunities for improvement in areas such as gender, generational and professional diversity. In the case of Latin America, the study participants show a growing concern to increase the diversity of directors in Latin American boards in order to have a more inclusive vision of the needs of their stakeholders (customers, employees, partners).
One of the unusual findings that was identified in the study in the region is related to the different perceptions of men and women about their own boards and that does not have a direct relationship with the objective diversity reported. “It should be noted that even when a board's observed diversity is at a certain level based on observable characteristics, women on average report a lower level of perceived diversity. Working to understand why this misalignment exists could help promote inclusivity and better decision-making on boards in the region.” it states Camelia Ilie, Dean of Executive Education and Strategic Innovation and Chair of INCAE's Center for Inclusive and Sustainable Leadership.
Likewise, several participants highlight that, in the case of the existence of a leader with greater seniority or a more dominant leadership, diversity, even if it exists, has less impact. It is not enough to have a wide variety of profiles on the boards of directors, but rather the need for complementary work to integrate members and the development of a collaborative culture, where all members can participate equally, is seen. On the other hand, the presence of younger people is one of the most outstanding aspirations of all those surveyed, considering that the lack of generational diversity diminishes the ability to understand the needs of all the market segments that their companies serve.
Another of the key points to highlight in the region has to do with leadership on the boards of family businesses. The common concern among men and women is the lack of external and independent directors on their boards. Independent, non-executive directors can bring new perspectives to boards. In the case of family businesses, independent directors can balance power among family members.
In conclusion, Latin American companies not only need to invest in a more inclusive culture to level the diverse voices on their boards, they also need to focus on bringing new generations and independent board members to their corporate governance bodies if they want to include the majority. of the perspectives of its stakeholders and, therefore, increase its creation of value and competitive advantage.
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About INCAE Business School
Latin American Leadership. Global Competitiveness.
We promote the development of the region through the training of leaders, applied research and the promotion of intersectoral dialogue. The sustainable development of Latin America requires responsible, innovative and up-to-date leaders. As the best business school in Latin America, INCAE has promoted the progress of Latin American society through the training of talented regional leaders through Master's and Executive Programs.
For more than five decades, we have worked together with companies, international organizations and professionals of the highest caliber to solve problems, develop capacities and prepare them to respond to the demands of the future. This global perspective has been enriched by a comprehensive vision of sustainability pioneered in the region that involves social responsibility, shared value in the first decade of the new century, and more recently the Social Progress Index as a valuable measure to achieve well-being and increase the competitiveness of Latin America.
Diligent was born to improve the corporate governance efforts of the Board of Directors. At Diligent, it strives to make the processes and management of corporate bodies simple and efficient. As the responsibility and efforts of the Board of Directors increase, Diligent grows, adapts and develops new and better products.
Diligent Boards, its flagship product, is the most widely used portal for the Board of Directors in the world. More than 700.000 officers and directors at 19.000 companies trust Diligent. Diligent has the highest customer retention rate in the portal industry for the Board of Directors, at 98,8%.