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Improving Performance through Good Governance

Good corporate governance helps firms improve performance, drive growth, manage risks, attract and retain investors, and weather financial crises. To be truly effective, a board requires a diversity of skills, cultures, and views to make smart decisions with lasting impact.


The Business Case 

To be effective, a board requires a diversity of skills, cultures, and views to make smart decisions with lasting impact.

Research shows that a broad set of business benefits, such as improved financial performance and shareholder value, increased customer and employee satisfaction, rising investor confidence, and greater market knowledge and reputation, is associated with gender diversity on corporate boards.

Research also indicates that more investment fund companies are including gender diversity indicators among their criteria – a move that suggests investor confidence may improve with the addition of women to a company’s board.

Still, while companies may express a willingness to change and reform, they may not know what to do or how to do it. IFC’s Corporate Governance Group has identified three guidelines to help companies plot their diversity progression:

  1. Understand the underlying reasons for diversity initiatives and spell out what they hope to achieve to appropriately manage expectations.
  2. Cast a wide net in their director search and look beyond the relatively small inner circle of familiar corporate boardroom faces to find equally qualified—or more qualified—individuals who can offer fresh perspectives.
  3. Need to understand the urgency of taking action now as the diversity momentum is growing and companies that fail to make a move risk being left behind. Companies that have already appointed a female director should consider adding more to achieve a critical mass to demonstrate a commitment that is less about fulfilling a mandate and more about deepening and broadening the board’s existing skillsets.

From : https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/ifc+cg/topics/women+on+boards+and+in+business+leadership