Who sits at the table? Diversity and competence in governance

THE boardroom has often been described as the table where the future of organisations is shaped. Around it, critical decisions are taken that affect employees, customers, communities, investors and society at large. Yet an often-overlooked question is this: who sits at that table, and why does it matter?

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The legitimacy of governance rests not only on policies and processes but also on the people entrusted to lead. Their mix of skills, experiences, perspectives and integrity determines whether governance delivers value or falls short.

Boards poorly composed risk becoming echo chambers, where decisions reflect narrow thinking and familiar interests. By contrast, boards that bring together diverse expertise and perspectives are more resilient, adaptive and trusted. The composition of the governing body is therefore not a technical formality, but a fundamental test of governance integrity.

Effective governance requires boards that are competent. This means more than assembling prominent names or long-serving professionals. It requires directors with the right blend of skills to navigate today’s complex environment: financial acumen, digital literacy, ESG expertise, risk oversight and industry-specific knowledge.

King IV, in Principle 7, emphasises that the governing body must have the appropriate balance of knowledge, skills, experience, diversity and independence to discharge its role effectively. Without this balance, boards are vulnerable to blind spots.

Homogeneous groups often fall prey to groupthink, making them less likely to anticipate disruption or challenge weak assumptions. Competence frameworks, director training and continuous development are becoming essential, not optional.

Diversity in boardrooms is equally crucial. It is no longer enough to meet compliance requirements or tick boxes. Diversity brings richness of perspective that improves decision-making and strengthens stakeholder confidence. Gender diversity has been shown to enhance board effectiveness and investor trust. Racial diversity ensures that boards reflect the societies in which they operate, strengthening legitimacy.

Generational diversity is often overlooked, yet vital.