Essay: Board Diversity In Environmental Sustainability - Insights From Singapore Stock Exchange.

With the globalization, increased competition there has been an increased awareness regarding the use of the natural resources and the overall environmental sustainability. The selected article is important as it highlights the growing concerns in relation to social issues and climate change. The article highlights how Singapore Stock Exchange published a consultation paper on diversity and climate. The diversity and climate change issues can be addressed only when board diversity is maintained. Such a board diversity must be based on a range of experience, gender, skills, cultural backgrounds and disclosures must be made in the annual reports of the entities. The content of the article is in line with the requirements of the UK Corporate Governance Code as the code also requires the companies to maintain a diverse board of directors to ensure that the interests of different stakeholders are efficiently addressed. The article further acknowledges the growing body of academic research on how board diversity benefits dimensions of sustainability and resilience of businesses. It is imperative to note that varied studies have shown a positive relationship between the board diversity, improved board performance, efficient environmental sustainability practices, and overall firm performance. This is because a diverse board of directors ensures innovative practices of business leading to resource conservation and efficient sustainable practices. The efficiencies arise in form of reporting quality of sustainable reporting. The significance of sustainable reporting is increasing considerably and a range of companies are doing it voluntarily to maintain the goodwill as well as to elaborate the programs undertaken in terms of addressing the competitor, on. The various studies have additionally shown that there are positive results in terms of economic performances as well, as the stakeholders have higher levels of trust in the entities that engage in environmental sustainability practices and have diverse board. This is yet another motivation for the boards and companies to engage in such practices. However, the article also highlights the fact that the diversity alone is not enough to address the sustainability issues. The risk of more diverse board is in form of possibility of cognitive conflicts and thus, a strong leadership is necessitated in the management of companies. In addition, the diversity is not guarantee of efficiency in sustainability. While one industry may benefit from such practices, the other industry may not. Thus, it can be concluded that the article highlights a range of issues pertaining to the relationship between diverse boards and environmental sustainable practices.  

Journals

Ferrero-Ferrero I, Fernández-Izquierdo M, and Muñoz-Torres M, 'Integrating Sustainability Into Corporate Governance: An Empirical Study On Board Diversity' (2013) 22 Corporate Social Responsibility and Environmental Management

Qureshi M and others, 'The Impact Of Sustainability (Environmental, Social, And Governance) Disclosure And Board Diversity On Firm Value: The Moderating Role Of Industry Sensitivity' (2019) 29 Business Strategy and the Environment

Online resources

Eu Lin F, 'Board Diversity For Resilience And Sustainability' (Businesstimes.com.sg, 2022) <https://www.businesstimes.com.sg/opinion/board-diversity-for-resilience-and-sustainability> accessed 1 January 2022