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Board configuration: are diverse boards better boards?

N. Van der Walt (Professorial Fellow of the University of Wollongong in Australia and CEO of the University of Wollongong Dubai in the United Arab Emirates. Prior to this, he held the Chair in Corporate Governance and Leadership at Massey University in New Zealand. A director of companies, he also consulted to organisations in Europe, Africa and Australasia. Professor Van der Walt is the Honorary Consul for South Africa in Auckland.)
C. Ingley (Ingley lectures in corporate governance and strategic management at Massey University. She is a director of companies in New Zealand and a corporate mentor to CEOs.)
G.S. Shergill (DLectures in finance at Massey University and has a particular interest in corporate governance and small business.)
A. Townsend (Risk analyst with the ANZ National Bank Group where he has particular interests in strategic projects.)

Corporate Governance

ISSN: 1472-0701

Publication date: 1 March 2006

Abstract

Purpose

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The purpose of this research paper is to explore the proposition that diversifying the board in terms of gender, ethnicity or skill base may require consideration of the specific strategic environment of the organisation. The proposition arises from the question as to whether or not greater diversity in board configuration is desirable in certain circumstances and considers the group dynamics, skill mix and capabilities that are required by boards under different conditions of change and strategic complexity.

Design/methodology/approach

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The study examines the financial performance of New Zealand publicly listed companies over a five‐year period and focuses on changes in board composition, strategic activity and implications for corporate performance.

Findings

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The study finds limited support for the idea that board configuration, strategic context and corporate decision quality may be linked.

Originality/value

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This paper will be of particular value to those involved in the appointment of directors within the private and public sectors. In particular, it focuses discussion on the strategic environment faced by the organisation and the relevance of a range of potential selection criteria when appointing new directors. It is also of interest to researchers evaluating the value of social capital and gender equity in contemporary organisations as, based on empirical reseach, it challenges conventional thinking. By implication, the paper also questions whether or not boards are actually able to influence key outcomes in the manner expected by legislators.

Keywords

  • Boards of Directors
  • New Zealand
  • Equal opportunities
  • Women directors
  • Organizational structures

Citation

Van der Walt, N., Ingley, C., Shergill, G. and Townsend, A. (2006), "Board configuration: are diverse boards better boards?", Corporate Governance, Vol. 6 No. 2, pp. 129-147. https://doi.org/10.1108/14720700610655141

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited

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