Board Diversity: Does England’s Corporate Governance Code Push Harder than the SEC’s Governance Disclosure Rule?

England’s revised corporate governance code calls for boards that are “well balanced” with gender diversity to avoid “group think.” The revised code is an effort by the government to avoid future banking crises. Prime Minister David Cameron commissioned a report on what the government could do to increase the number of women directors. He said that more women on corporate boards would increase productivity. The report is due in February.
On this side of the pond, in 2009 the Securities and Exchange Commission adopted “The Governance Disclosure Rule.” The rule requires companies to consider diversity when nominating director candidates. The SEC doesn’t define diversity letting public companies to figure it out for themselves. The SEC notes that investor knowledge about diversity policies is useful, and says that a meaningful relationship between diverse boards and improved corporate financial performance exists.
We hope that in 2011 the S.E.C. will take a leadership role in defining diversity so there is no ambiguity about the issue. We wish you all a happy and healthy New Year and look forward to reporting on gains in the number of women directors in the months to come. If you haven’t done so already, please register your support for 2020 Women on Boards. Together we can make it happen!