Legal Insights


Board Diversity: A Step Towards Good Corporate Governance

Corporate governance involves the system of rules, practices, and processes by which an organisation is managed. It involves balancing the interests of an organisation’s stakeholders, such as shareholders, management, Board of Directors, financiers, the Government, consumers, suppliers, and the community.

The Board of directors plays a pivotal role in ensuring good corporate governance in every organisation. This is so because they provide oversight in relation to the administration of the organisation and ensure that set goals and objectives are achieved while ensuring compliance with the requisite laws and regulations.

As such, it is essential to periodically assess the Board’s composition to ensure that it consists of persons with the right level of skills, expertise, and competence to drive the attainment of corporate goals and objectives. The need for Board diversity cannot be overemphasised because poor and/ or inadequate Board composition can result in negative Board performance and other forms of corporate failure.

The discussion on Board diversity has taken up an important place in corporate governance today because Board diversity is viewed as an apparatus for a solid inward control framework, as it expands the Board’s proficient and powerful dynamic in administration.

This paper will introduce the concept of Board diversity and its benefits. It will also address the challenges of Board diversity and offer recommendations to manage these challenges effectively.