The Association of British Insurers (ABI) has called on UK enterprises to increase diversity and inclusion through board appointments.
A new report from the organisation, which claims to be the UK’s leading shareholder group, has been designed to help companies to better understand the views of institutional investors on effective boardroom performance.
The Board Effectiveness report highlights three key issues that investors believe make a board successful, the first of which is increased diversity through the inclusion of a greater number of women on boards.
By studying practices currently in place at FTSE 350 companies, the report makes a number of recommendations of how greater boardroom diversity and gender equality might be achieved.
It says that companies should ensure that achieving diversity of perspective is a key objective in appointing new board members and that they should provide clear statements on the steps they are taking to increase the number of women on their boards.
The report also calls on chairmen to widen their search for non-executive directors to include a broader talent pool.
“Board diversity is an essential driver of board effectiveness. We believe that ensuring the board is composed of members from different backgrounds, with a wide range of skills and experiences, introduces a diversity of perspective that will help to promote the company’s long-term success,” said the report.
The other key issues the ABI claims make a board effective are succession planning, which addresses board engagement in planning for succession of all senior management, and board evaluation, which includes discussions on risk management, corporate strategy, geographic markets of operation and reporting.
It follows the recent Women on Boards report from Lord Davies, released earlier this year, which called on chairmen of FTSE 350 companies to make clear what goals they have set in terms of appointing more women to board positions by the end of September.
