15% consider that gender diversity is today “highly represented” in the profile of candidates for the board of directors. They do value it, but “there is still pending work,” says the director of the Santiago Stock Exchange, Paula Valenzuela.
Regulatory uncertainty -constituent process and change in the economic model-, and the social context -understood as unemployment, weakening of institutions and violence-, are the most relevant factors for the sustainability of companies in Chile, according to the first survey “Diversity in corporate governance” carried out by the Council for Diversity in conjunction with the Ministry of Women, CPC, EgonZehnder, Humanitas and the Santiago Stock Exchange.
The 88% of respondents -75 presidents, directors and general managers of companies listed on the stock exchange between December 2021 and March of this year- considered both factors as very important.
“There is a deep connection between business and society. To the extent that there is a clear framework for action, companies are empowered to make investment decisions aimed at sustainable development. The greater the uncertainty, the greater the risk”, comments the director of the Santiago Stock Exchange and one of the promoters of this initiative for diversity, Paula Valenzuela. And he highlights that “the internal and external scenario is challenging and uncertain in multiple dimensions.”
In order of relevance, it was followed in the list by the factors of talent management (72% rated it as very important) and the impact of digitization and new technologies (71%). Issues such as post-pandemic, consumer behavior and climate change were considered highly important for less than 50% of those surveyed.
Paula Valenzuela points out that these are issues that companies have already been incorporating into their management. She clarifies, yes, that when adding the answers “very important” and “moderately important”, all the factors show about 74% interest.
Top managers were also asked about the top priorities for companies today. Here the reputation jumped with 80%, seconded by identification of risk map, compliance and culture of integrity (68%) and cybersecurity (68%).
When looking at these same priorities, but towards the future, the answers moved towards innovation, digital transformation and new technologies (77%); organization, talent management, productivity and sense of mission (75%); risk map identification, compliance and integrity (74%) and cybersecurity (72%).
skills and diversity
About the skills most important in the directories, the respondents answered that they are compliance, flexibility, innovation and awareness of the company’s social role. In the future, leadership is mainly due to innovation.
When asked about how represented the different types of diversity are in the definition of profiles for candidates for their directories, the answers show that there is none that exceeds 38% (as is the case of work experience). Knowledge of a particular subject (32%) and other skills (29%) are then located.
If the same types of diversity are considered, but in their representativeness in the future, the jumps in skills (71%) and knowledge of particular topics (65%) stand out. Work experience appears in third place and gender diversity in fourth, with 36%.
The results of the survey shed light on how to bring supply and demand for diversity in corporate governance closer together, says Paula Valenzuela, and points out that, with this information, the Council for Diversity will move forward in implementing, together with the GCPUC center and the Women’s Committee – made up of Women Entrepreneurs, Women Corporate Directors, Women’s Community, Chile Women Redmad and Hay Mujeres-, a program of talks on strategic issues for companies.
This program of meetings will be held every two months and considers the invitation to approximately 25 people each time.
“There is pending work”
-Less than half of those surveyed consider that diversity is highly important in directories. Why?
-Companies value diversity, but it is a matter in which there is still work to be done. That is part of the Council’s concerns for Diversity.
The diversity that companies seek is the one that responds to the new skills that are identified as priorities in the boards: innovation, accountability and flexibility.
The first objective of corporate governance is to generate value for its shareholders and its various stakeholders today and in the future. To achieve this, the composition of your board must respond to the business strategy and the business context in which it operates, and to have heterogeneous views that enrich decision-making.
-When asking how well represented the different types of diversity are in the directories, a low level is revealed in all aspects. How can progress be made in this if at the same time diversity is not considered a priority?
-Aiming to eliminate the perception that diversity is just a fad. Diversity is a requirement for companies to be sustainable and that has already begun to gain strength. It is necessary to respond to new strategic issues and skills with a different perspective. This -according to the study- with a focus on a diversity that has the skills, knowledge and experience that today’s companies require.
-The aspects that rise in the future are diversity of skills and knowledge of a particular subject, which refer to the technical. What about the benefits of diversity of gender, age or culture?
-Diversity generates better decisions thanks to its implicit heterogeneity; In the case of gender diversity in decision-making processes, there are higher levels of responsibility and order in women, as well as affability and risk aversion, generally showing less excess of confidence, which generates that they are more willing to consider the opinions of others in making decisions.
Ultimately, compelling reasons exist.
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But it is key that senior management define it as an important issue within the company’s strategy, committing to specific goals and objectives, resources, processes, policies, monitoring and continuous improvement.
The challenge is that this diversity, in its different spheres (gender, age, knowledge, skills) is integrated into the strategic development of businesses.