Women and young people are sidelined on boards of directors. And governance is losing its diversity

“The real crux of the matter,” Visentin points out, “is the need to foster greater awareness and a culture of governance.” A culture which, according to the president of CUOA, must involve not only owners and senior management but also front-line managers. “In many organisations, governance is still perceived as a set of bureaucratic obligations or, worse still, a necessary cost imposed by regulations, and this is an anachronistic view and, above all, a dangerous one for businesses aiming for growth.” In other words, if competitiveness is not to be put at risk, the shift in perspective must be substantial. “Advanced and well-designed governance,” adds Visentin, “is in fact a strategic investment and the primary enabling factor for supporting any development path.” A path that can also be supported through mergers and acquisitions – processes in which governance becomes the ability to align decisions, timelines, priorities and responsibilities, and to manage people and cultures, transforming the objective of value creation into a concrete industrial project.

When asked whether companies are diversifying their senior management because they are convinced of the economic value of diversity or as a result of reputational and regulatory pressures, Visentin does not give a definitive answer, noting that ‘both factors are likely at play, but the balance between them is still evolving’. It is, however, an objective fact, as noted in the Observatory, that companies most exposed to the capital markets show relatively higher levels of openness and that firms with more structured governance perform better on average. ‘Diversity in terms of gender, age and skills,’ says the President of CUOA, ‘appears less as an end in itself and more as a dimension of the overall quality of the decision-making system’. It is therefore not merely a question of including new people in senior management, but of enhancing the company’s ability to interpret complex contexts, manage disruption and make more robust decisions.

This is probably the most significant transformation on the horizon. According to Visentin, in practical terms, the Board of Directors must cease to be viewed primarily as a supervisory body and increasingly become a ‘strategic driving force’, capable of setting out guidelines and approving investment plans that support growth. A Board of Directors equipped to meet today’s challenges must broaden its scope of expertise; it must combine financial and legal acumen with the ability to understand issues such as sustainability, digital innovation and geopolitics. And, no less importantly, there must be a genuine dialogue with management, so that operational execution remains consistent with long-term objectives.

“An effective board,” emphasises Visentin, “should be characterised by a diversity of perspectives, with directors from different backgrounds, but also by independence, with directors who are not tied to management or the controlling shareholders.” The goal companies must strive for is to ensure that key decisions – from investments to extraordinary transactions – are taken in the interests of the company and its sustainable growth. From this perspective, the involvement of women and young people in strategic decision-making becomes one of the indicators of an organisation’s ability to open up its decision-making process to diverse experiences and skills.

The real challenge, as revealed by the Observatory’s figures, is not to replace one generation with another, nor to introduce diversity onto boards of directors merely as an exercise in representation. The challenge for businesses (and family-run businesses in particular) is to build more structured boards, capable of combining experience and innovation, continuity and change, knowledge of the business and the ability to scrutinise their own decisions more closely and look beyond their own boundaries. The process of renewal – as confirmed by the figures on the presence of women, Millennials and Gen Z in the decision-making chambers – is still slow, but the deeper issue is fundamentally another: to what extent are the centres of corporate power equipped to make decisions commensurate with the complexity of the present? The answer, as we have seen, also lies in the composition of boards of directors. ‘Diversity in terms of gender, age and skills,’ concluded Visentin, ‘is not merely a goal of inclusion but a dimension of the overall quality of the decision-making system.’ And it is to drive this necessary evolution that CUOA has established the Corporate Governance Centre, a new permanent forum for research and debate dedicated to developing corporate governance models for Italian companies.