Benefits of Diversity in Board Directors (AQA Paper 2 2018, Q1.4)

Here is a suggested response to the question on the benefits to M&S of the diversity of its board directors.

M&S is a multinational business with operations in many countries. One benefit of the diversity suggested by the data in Appendix E is, therefore that the Board has members with experience of running businesses in different countries. These include developed economies such as Germany and Hong Kong as well as emerging economies such as China and India which are likely to be important sources of sales and profit growth for M&S. This international experience should help the Board understand the risks of expansion into international markets and, therefore, take better strategic decisions.

M&S is also a multi-channel business, operating from physical stores, via catalogues and online. The data in Appendix E suggests a diversity of industry experience in the Board, for example with 40% of the Board having experience of e-commerce and technology. This diversity will be particularly beneficial for M&S as the Board will need to take important strategic decisions about how to develop its multi-channel distribution, with important investment decisions needed on where to focus M&S financial and other resources. A diversity of experience will help ensure all aspects of those decisions are considered.