Enhancing stakeholder diversity in the board room

Article published on April 16, 2008
community published
Article published on April 16, 2008
The Erfurt Meetings – March 2008 With globalization, the world is becoming more and more complex and interconnected. In business, this complexity and interdependence are reflected through the increasing pressure of different stakeholders, internal and external to the firm.

We believe diversity can promote and bring to the Board the necessary capabilities, creativity, openness and flexibility that today’s strategic challenges demand.

We recommend that the Board tries to achieve diversity of members, not only in the traditional areas of the company, but especially in areas reflecting new pressures, demands and expectations of the society such as issues related to the company’s operations in emerging countries, inequality, environment, creation and transmission of knowledge, human rights, etc.

• Diversity should not be understood as an imposition of the society but as a proof of the responsibility of the company towards its internal and external stakeholders. • Diversity is not an end but a means for the harmonization of interests for the long term benefit of the company and the society. • Diversity should be promoted mainly not by law but by conviction, agreement and transparency, although law and recommendations could help. • The diversity should be sought mainly to face the current and future challenges of the company, the resources needed, the capacities that a company has to develop and the externalities it creates. • We propose for Boards to pilot and make the experience of diversity and to report on it. • The dissemination of the experience of Board diversity that is already implemented in the business practice should be promoted by relevant institutions such as Board associations, business associations, academics, etc.

In regard to diversity, the Board composition should be an expression of the understanding and practicing of corporate responsibility in a global context.

Erfurt, March 18, 2008

This document is the output of the common work of a group of 11 European professionals, gathered in Erfurt (Germany) from 15th to 18th March 2008. The group members originate from 10 different European Union Member States (Belgium, Denmark, Finland, Hungary, Italy, the Netherlands, Poland, Slovenia, Spain, Sweden). They have an extensive experience in the issues of corporate governance, gained in positions of general management of corporations, in Boards of Directors and in Supervisory Boards, in executive search, in trade unions and as researchers and professors in business schools. The full version of the document may be downloaded for free at: http://www.CitizenSeminars.eu/Downloads/ECS_BoardDiversity_2008-03.pdf