The Case for Having Women on Corporate Boards
But don’t just take our word for it. From a public call by heads of FTSE firms to Hewlett-Packard’s example to South African leadership, this section offers evidence galore of the advantage to companies of gender diversity in the boardroom.
WHY BOARDS NEED WOMEN
Best People Not Best Friends
by Susan Stautberg
Boards can no longer be retirement homes for the people who have time – former CEOs, ousted politicians, and the occasional member of the non-profit sector. Boards of Directors should have brainpower and the best people – not best friends.
Research shows that women make their make their most effective contributions when they are on boards with other women, a phenomenon that enables women to be listened to as individuals, rather than viewed as token or representative of a special point of view. A study by Catalyst, found that companies with at least three women on their boards on average had better financial results than companies with no or only one woman.
Companies need to consider putting the next generation in the boardroom and onto some of their key committees (as Microsoft has), on Advisory Boards (as Northwestern Mutual has) and matching their boards to their customer base (as Hot Topic has).
A new paradigm of diversity is developing. No longer 10-12 grey haired men in their ‘60s thinking about business and strategy from the same perspective. As corporations are changing, experts will need skill sets such as IT, manufacturing in India or China, outsourcing, supply-chain, marketing, going global, etc.
Leaders in their ‘40s, often from a hot shot company, are more in tune with their generation of consumers, and communicate globally. They understand that younger generations live, consume, and connect differently. They text message, use social networking sites, and e-commerce. Some companies market to their younger customer base extensively such as clothes, computers, music, and cars. They need to know how.
The right people with the right background and diversity can give a company connectivity to its customers and constituents. The advent of the internet and inexpensive communications makes it possible for any company, whether small or large, to take advantage of the best brains in the world, cutting across industries, countries and age groups.
WHAT'S THE PROBLEM?
There are some obstacles to overcome such as:
- Aging baby boomers who don’t want to retire and play golf, become ambassadors, or just fade away
- Search companies and firms, CEOs and directors who even don’t understand the value of a director in their ‘40s or can’t explain it to search committee
- Candidate’s who’s bios, interview techniques, are not a good sell
The majority of people became directors in their ‘50s or early ‘60s, and serve on 2 to 3 three year terms and perhaps stay on a board longer. Tech knowledge and niche skills help younger directors to obtain board seats in certain areas. Over 45 year olds is easier than those younger than 45.
Some if the most common area of expertise companies are looking for in the US from Directors under 50 are:
- Stanford grads or others who started small internet companies or current CEOs of technical companies i.e. Susan Decker on the boards of Berkshire Hathaway/Costco/Intel
- Former or current private equity managers or financial wizards, i.e. Mellody Hobson on the boards of Starbucks/Estee Lauder/Dreamworks SKG
- Hot CEOs
- Retail/merchandisers , i.e. Andrea Jung on the boards of GE/Apple; Penny Hughes on the boards of The Gap; Roxanne Austin/Target Corp./Abbott Labs
- Heirs, i.e. Eleuthere DuPont, Aerin Lauder
GETTING ON BOARD...
Susan Stautberg, President of PartnerCom Corporation which creates and manages Advisory Boards and conducts Corporate Directors Searches, has placed over 250 women onto boards and Advisory Boards. She runs a programme called OnBoard Bootcamp to provide an insider’s guide on how to be selected for a board.
These seminars are designed to benefit women in their 40’s who:
- Are already on a non-profit or small company boards and would like to be selected by a larger one.
- Are about to become a board member
- Would like to be selected for a board
- Would like to establish an action plan for getting on boards in the future
OnBoard Bootcamp continues after the programme to provide guidance, counsel, and updates of Advisory Board and Board opportunities.
- UK Minister Vows to Push for Women on Boards
- 15% of FTSE 100 Directors are now Women
- UK Cross-Company Mentoring Programme Crosses into France
- Women Hold 8.9% of Board Seats at Hong Kong Blue Chips
- Publishers of Female FTSE Report Call for Women in the Boardroom Quota
- Now They Like It, Now They Don't (How Investors Value Companies With Women in the Boardroom)
- Bringing More Women Into the Boardroom
- Action in New Zealand to Balance Boards
- Women on UK Boards Earn Half as Much as Men
- Grim Data for Chicago
- New Zealand Minister of Women's Affairs on Getting More Women on Boards