Susan C. Keating, CEO of the WomenCorporateDirectors Foundation, explores what it really takes to get more women onto corporate boards.
Every leadership team knows that constant transformation is essential to survival. But one vital area remains stubbornly unchanged.
Companies are prepared to replace entire technology systems, restructure their global workforces, and throw out sacred business models as part of their transformational activity. Yet despite a willingness to make monumental, sometimes painful, changes in these areas, the boardroom has remained relatively unchanged compared to the world outside.
Globally, boards have remained significantly male-dominated, with only incremental progress being made towards a more gender-balanced boardroom.
By the numbers
Looking at S&P 500 company boards in the US, 24% of the directors are women. The number is just under 29% in the FTSE 100. Germany is similar: on the supervisory boards of their 424 largest public companies, women represent less than one-third of the seats (29.7%).
Among companies in the Tokyo Stock Exchange’s First Section, women hold just over 10% of the board seats. Singapore’s top 100 primary-listed companies have 13.1% female representation. Across Latin and South America, the percentage is 7.2%. The numbers are increasing, but progress needs to move much more quickly.
Numerous pieces of research from MSCI, McKinsey, Harvard Kennedy School and more have shown the link between having more women on board and stronger financial performance.
Companies with women on their boards also generally report better oversight over underperforming CEOs and greater employee productivity growth.
Best-practice boards are making progress. Understanding their fiduciary duty, many boards and their nominating committees have been appointing women directors. But on the whole, progress toward more gender parity is not happening fast enough.
The WomenCorporateDirectors Foundation (WCD) recognises that more specific actions are needed to get more women onto boards and support them once they are there.
In a number of countries, the government has taken the matter into its own hands. Many countries in Europe, India, Malaysia and others have established quotas for the number of women that public companies must have on their boards.
WCD members’ opinions on quotas run the gamut – from actively supporting and writing the legislation, to ardently standing for deregulation – and so WCD as an organisation does not take a firm stance on quotas per se. However, WCD supports the efforts of all members focused on increasing gender parity in the boardroom.
There are in fact many tools that can be used to drive gender parity in the boardroom, and it will take executing effectively on a number of these to get to where we want to be.
Having 2,400 members – the vast majority of whom serve on large publicly-traded or private company boards, spread across six continents– means that we are aware of the common challenges that women directors everywhere face today.
These are what we see as the areas essential to breaking through those challenges:
A foundational aspect of WCD’s mission is education. This is targeted not only at women board members, but also board decision-makers, many of whom still believe that there is a “lack of a pipeline” of women board candidates.
Throughout our conference programming and research papers, we feature thought leadership from women directors. Topics include cyber-risk and emerging technologies and we showcase women who are at the top of their industries.
These women would be invaluable additions to any board.
Given limitations on the number of outside boards on which a CEO may serve, many companies are recruiting female candidates from below the CEO level.
So we seek to educate boards about this strong pipeline of women by getting their names “out there” with speaking, writing and media opportunities.
We are all aware of the built-in advocacy created by long-standing male networks, private clubs, all-male universities and the like. This societal reality that bleeds into the business world is a challenge to overcome.
In serving as a broader voice for not only our members but for all women directors, WCD is committed to working with partners in our advocacy efforts. We appreciate that other voices – such as BlackRock and State Street in the investor community – are also calling for more women on boards.
In 2018, WCD launched the WCD Nominating & Governance Roundtable, which brought together male and female nominating and governance chairs from top companies to focus on how to encourage the recruitment of diverse candidates.
High-level networking is indispensable for those with the highest responsibilities.
As leaders ascend to the boardroom, they find that the issues they deal with and the responsibilities they bear are not understood by most.
WCD provides directors with an invaluable space to be able to discuss issues with peers – to share each other’s experience and knowledge and wisdom, as well as share board opportunities.
With chapter meetings, institutes, networking get-togethers and social media, we connect directors with others who ‘get it’.
We see many more boards wanting to bring on more female directors, and they are actively seeking out qualified candidates. It’s important to continue to build the next generation of board members as the demand grows.
Two years ago, WCD launched BoardNext to support experienced, highly qualified, board-ready women as they are poised to step onto their first public corporate board.
With these programmes, along with the increasingly strong and vibrant connections that women directors are sharing worldwide, the female boardroom talent available is more powerful than ever.
This article is from the latest ‘Women, Diversity and the Path to Greater Inclusion’ edition of the Odgers Berndtson global magazine, OBSERVE.
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