Corporate boards have the task to monitor the management of companies on behalf of the companies’ shareholders and other stakeholders. Boards are the direct representation of these stakeholders and form one of the most important aspects of corporate governance. Therefore it is important that the people selected have sufficient experience, skills, are sufficiently independent and act in the best interest of all stakeholders. Additionally, diversity of its members can add value to the board. When diversity leads to differences in perspective and experience, boards will be able to assess problems from a broader point of view and are more likely to take into account the best interest of all stakeholders. Studies have shown a positive correlation between gender diversity on board and financial performance. When it comes to Board compositions in terms of a balanced mix of skills, corporate boards’ needs will differ across industries and per companies based on the existing and required skills and the available pool of qualified board members.
RobecoSAM’s question assesses whether diversity and the complementarity of skills are considered in a company’s board nomination process and if there is a formal policy for this in place.