ECGI Conversations - Roy Shapira

Watch the latest ECGI Conversation as Dr. Tom Gosling interviews Roy Shapira, Reichman University, on his recent paper ‘Specialist Directors’ co-authored with Prof. Yaron Nili, University of Wisconsin.

The paper explores the recent phenomenon of directors being appointed to boards to bring specific expertise in ESG or related areas such as climate, DEI, cyber.

Key findings include:

     ▪️ From 2016-22 there was a 20x increase in the prevalence of directors in S&P 500 companies identified as having specific expertise in ESG and related areas

     ▪️ But disclosure remains a “cheap-talk environment” with little standardisation or consistency

     ▪️ While bringing expertise onto boards can bring benefits, there are also downsides:

       -  Injecting expertise can distort board dynamics and create authority bias with excessive deference to the “expert”
       -  Appointing experts can require larger boards and may conflict with other dimensions of diversity
       -  A focus on expertise can lead to “boardwashing” especially in an environment where there is little standardisation of disclosure

     ▪️ The interview ends with recommendations for regulators, the judiciary, and academics relating to this trend