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Obviously, after the wide critics over the financial literacy of the board of directors and also under the higher anticipated of the board’s role in spotting the financial report errors as well as safeguard the financial report in term of providing a true reflection on the company’s financial and operational information with full disclosure of the relevant information, one of the major consequence for the diversity of the Australian board rooms is that it will be reduced to some extent. Two kinds of reduce in such diversity could be anticipated:
The first kind of diversity reduction is that many new appointed directors would be from the accounting and financial background, this will reduce the chance of other talents from other fields to be selected as the members of the board to contribute to the diversity of the board of directors.
The second kind of diversity reduction may not be easily spotted. As mentioned in the articles, it is expected that the current members of the boards will be required to study the financial and accounting knowledge and thus they will come to study the financial reports while their other jobs would be neglected to some extent.