Gender diversity is being relentlessly pushed. The oft-championed argument that it improves company performance does not pass muster. Instead, the valid argument may be social justice for women who are disproportionately under-represented on boards.
The Nine-Year Rule for director independence was meant to encourage board renewal. However, it often ends up achieving neither. If renewal is to achieved, either the rules or their implementation must change.
Independence is a state of mind. The regulatory tests of blood and money are inadequate for determining independence. The challenge is for every director to be professional and have the moral courage to rise to the occasion and be truly objective and independent.
The ideals of an effective board are not found in the regulations. The effective board is one that emphasises performance rather than just conformance. It focuses on values as well as value. And it should strongly support as well as challenge management.