Board Diversity As An Effective Corporate Governance

Board Diversity as an Effective Corporate Governance Tool in a Developing Economy: Challenges and Prospects. NAME: BASSEY EDIDIONG OFFIONG The thesis will examine the effect of board diversity as a critical factor for ensuring effective corporate governance among public companies across the globe. The motivation for the research came on the backdrop of the approval of the European Commission proposal by the European Parliament to improve the gender balance in company boards last year which calls to question what are the developing countries doing. It is hoped that at the end of this research, the study would contribute significantly to the Literature on Corporate governance exploring the issue of diversity (especially gender) in†¦show more content†¦5. Do secondary forms of Diversity have an overall effect on the profitability of the company? Background and motivation According to Cox â€Å"Diversity is the variation of social and Cultural identities among people existing together in a defined employment or market setting† Primary categories of diversity include gender, race, ethnicity, age etc. Secondary categories of diversity include education, experience, marital status, beliefs, and backgrounds. The Nigerian Code of Corporate governance states that the Board should be of a sufficient size relative to the scale and complexity of the company’s operations and be composed in such a way as to ensure diversity of experience without compromising independence, compatibility, integrity and availability of members to attend meetings. From this clause, it is quite clear that not much has been put in terms of legislation by the Nigerian government to ensure diversity in the boardrooms as compared to their foreign counterparts who have established legislation on gender diversity. They are usually in form of quota such as Norway, or comply and explain requirements e.g. Australia. Although the Millennium development goals advocates gender equality to be accomplished by 2015, many developing countries including Nigeria still fall short of the mark. In Nigeria, for example, there are places where women and girls have no voice with women having no say in decisions that concern them such as marriage, business