Corporate governance drowning in regulations: No change on boardroom make-up

Too much regulation on corporate governance has had a negative effect on business success and failed to have any real impact on the make up of UK boardrooms, according to a new study on non-executive directors.

While it has been widely accepted that companies need to recruit non-executive directors from a wider talent pool, greater regulation has actually had the opposite effect, with many employers adopting a tick-box approach to avoid risks.

The report, compiled by business school Roffey Park and consultancy Cedar International, found that companies were largely sticking to established trends and failing to make any efforts to break the status quo, despite a range of new measures which are designed to encourage greater diversity.

Evaluation of boardroom effectiveness is still in its infancy and the report also identified a lack of softer skills such as emotional intelligence and ethical scrutiny.

Linda Holbeche, head of research at Roffey Park, said widening the current talent pool should be a national business priority and that change must come from within any organisation.

“Our study has highlighted how boards are be-coming overly risk-averse with an emphasis on box-ticking-style compliance rather than embracing diversity and using non-executive directors from a range of different backgrounds,” says Holbeche.

The report claims that post-Higgs boardrooms are just as conformist and conservative as they ever were, despite mounting legislation since the major corporate scandals of recent years.

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