11.1.1 Board Diversity

Board Diversity

Board diversity refers to the inclusion of members from various backgrounds, including gender, ethnicity, age, and professional experience, on a company's board of directors. Diversity is crucial because it brings a range of perspectives and insights to decision-making processes, enhancing the board's ability to address complex issues.

In recent years, there has been a growing recognition of the value of diversity in boardrooms. Diverse boards are more likely to understand and respond to the needs of a diverse customer base, innovate, and manage risks effectively. However, achieving true diversity remains a challenge for many companies, particularly in male-dominated industries or regions with less emphasis on inclusivity.

In India, the Companies Act, 2013, mandates that certain classes of companies must have at least one woman director on their boards. This regulation aims to promote gender diversity, but there is still a long way to go in achieving a more balanced representation of women and other minority groups on boards. Companies must not only comply with regulatory requirements but also actively seek to create inclusive cultures that value diverse perspectives.




Last modified: Monday, 21 October 2024, 10:44 AM