Board Diversity: The International View

Posted by: Jena McGregor on August 10, 2007

It’s a small sample, but an interesting study just landed in my inbox. Executive search firm CTPartners (formerly known as, ahem, Christian & Timbers) looked at the board make-up of ten technology companies in the U.S. and ten in Europe. (It specifically looked at “convergence” companies—those melding telecom, media and technology such as Google, AT&T and News Corp.—but for our purposes they’re technology firms.) Just 11 percent of the U.S. company boards had international members compared to 33 percent of European boards.

I’m inundated with studies and press releases about how there’s not enough gender and race diversity on public company boards. And it’s true. But in an increasingly global workplace, regional diversity on boards is just as important.

To get a sense of how international board member make-up looks in the broader market, I turned to another study, “The Changing Profile of Directors: Spencer Stuart Board Index 2006.” As you’d expect, a bigger sample provides better results: 45% of the largest 200 companies in the S&P500 have at least one non-U.S. director. Still, it’s surprising to me that a majority of these large companies don’t. In addition, most of these international directors are from Western countries similar in many ways to the U.S.—the U.K., Canada, Germany, and Australia. Just 5% of international directors, for instance, can claim India as a country of origin. As these emerging markets become more and more important, so will board members from these places.

Reader Comments

Thomas

August 11, 2007 10:09 AM

I don't know Jena, seems to me what's most important is what the director can bring to the table, not his or her gender or nationality. The last thing we want is to put a token person in an open slot instead of an industry maverick, a mover and shaker, or someone with a huge rolodex. Seeing things differently is one thing but having relevance is quite another.

Thomas

Arthur Harvey

August 16, 2007 10:02 AM

Europe, by definition, is "international". So, what is suprising, is that only 33 percent of European boards had international members. Board members should represent stakeholders. While India, for example, may represent a lucrative future market, for most well established international companies, that potential is only an incremental aspect of their overall business plan.

When you consider the inherent obstacles to changing board members, it is only natural to look at international diversity of boards of directors as an evolutionary process, influenced by changing markets and stakeholders.

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