BOARD DIVERSIFICATION – PRE – REQUISITE FOR SURVIVING LONGER

Any big company generally has a great board behind, which deals with setting goal, framing strategy, risk monitoring, succession planning and recruitment of best talent. It helps company to move forward.

If we observe the Boards of big listed companies like Tata, Reliance etc., board have a variety of skills, expertises and experiences among directors.

As per Corporate Governance norms, every company is required to frame Board diversity policy to ensure adequate mix at board level.

Why to have diversified board?

·         The company with diversified board, survive longer than others

·         It can deal with Succession planning

·         Enables company to mitigate risk

·         Experts of different fields can give diversified views at Board Meeting

·         Diversified views if moderated well and positively can result in decisions which are sustainable.

·         For e.g. If you want to launch new product, your board should consist experts of various fields such as expert in Market and sales , legal field, finance field, HR field, Environment expert or policy maker etc. Decision taken after deliberation with such experts will be a right decision.   

  

Appropriate Board of Directors should have following composition

Diversified board should also have appropriate mix of Age and gender. The board can have experts from following fields:

1.	Technical Expert
2.	Finance Expert
3.	Legal Expert
4.	Bureaucrat
5.	Human Resource Expert
6.	Other experts required, if any as per nature of your business