Although women moved into the workforce in great numbers in the 1980s, they still have to catch up to men in terms of leadership positions in corporate America. The New York human resources firm Catalyst found that women hold 16.9 per cent of officer positions in American corporations, and only 11 per cent of senior leadership line roles, last year.
The report shows little change in the number of women in the upper echelons of major corporations. Specifically among women’s share of board director positions in the F500: in 2008, Women held 15.2 per cent of board director positions, compared to 14.8 per cent in 2007.
Overall representation of women corporate officers and top earners in the F500 continued to stagnate as well: women held 15.7 per cent of corporate officer positions, compared to 15.4 per cent in 2007 and women held 6.2 per cent of top earner positions, compared to 6.7 per cent in 2007.
The question is: why are there so few women corporate board members? Those who have a proclivity to assume sex discrimination might fear the worst. Others might simply assume that relatively few qualified women were available for board slots, or that boards with women performed poorly in the marketplace.
Recently the London School of Economics released a study showing that publicly traded companies with more women on the boards of directors do better in terms of economic performance. This translates into billions of dollars of added value in some of the world’s most competitive businesses. This finding is reinforced by other international studies.
A McKinsey & Company report, Women Matter, found that “the companies where women are most strongly represented at board or top management level are also the companies that perform best, on both organisational and financial performance.”
The McKinsey study looked at the performance of companies with various numbers of women on their boards, and found that the largest gap in performance existed between those companies with no women on the board (poorer performance) and those with three or more (better performance).
Does this mean that if more women are good for profits, an all-woman board is best? The answer seems to be no. A recent study by the London Business School indicated that companies need a mix of men and women. It found that teams with a gender balance achieve the best results in most areas that drive innovation -they are more likely to experiment, share knowledge and complete tasks.
But, what can business leaders do?
Some in business say it is difficult to find suitably experienced women through conventional channels. Finding the right candidates may require a conscious effort to change the manner in which candidates are selected.
Experience is a big part of competence, but women’s experiences may not be the same as men’s. Benefiting from the different perspectives and life experiences that women bring to the boardroom could require looking beyond the profile of the usual board candidate.
Where are the potential women directors? Sometimes they may not be part of traditional networks. Women are unlikely to be present at the higher levels of management in the same numbers as men. Looking outside the usual circles is sometimes needed; women are represented in fields that are highly sought at board levels, such as the legal and accounting professions. This can reap rewards: brainstorming many options before shoulder-tapping can greatly increase the possible candidates for board appointments.
A conscious effort to generate many possible options for female board members could significantly aid the current board’s deliberations.
Getting more women into top management means providing more substantial career paths for women, with more opportunities to broaden their commercial experience and contribute as leaders.
Certainly, I think some chairmen and nomination committees feel there is less risk of a dysfunctional board if people come from very similar backgrounds, but this mistakes uniformity for unity. You need different perspectives and people asking questions from different angles. It improves the quality of decision-making.
Women win board positions on merit, but add value to the role with a different mindset, a different skill-set and a different style. Boards are intellectually and socially enriched by the presence of women, and are consistently more effective through balanced judgment and opinion in decision-making.