Just as it’s true for work teams, diversity on boards leads to increased innovation, productivity and performance. When different perspectives are represented—various ages, educational backgrounds and expertise—boards operate more effectively, according to Scientific American. While most CEOs know the benefits of having a diverse board, gender diversity on boards is still overlooked today.
Fewer than 20 percent of the approximate S&P board seats are currently held by women. At the same time, the Nielsen Company is reporting that almost all income growth in the United States in the past 15 years is generated by women exercising their growing economic influence. If women control about $20 trillion in annual consumer spending, shouldn’t we do more to have women in executive level positions and as directors on corporate boards? Here are some ways we can make it happen.
1. Push beyond a common excuse. Don’t use “we can’t find any qualified women,” as an excuse. If you don’t know a qualified woman director off the top of your head, go outside your network. Invest in search firms that specialize in getting women on boards, and reach out to women’s groups like WEL. Some public companies hire search firms to assist with diversity, but not enough to sway the statistics.
2. Realize the value of gender diversity to make it a business imperative. Research by Catalyst—a not-for-profit that seeks to expand opportunities for women—shows a strong link between the presence of women on boards and corporate reputations. Female directors serve as role models, and therefore, improve female employees’ performance and boost companies’ images. Also, women are often more in tune with women’s needs than men, and this has a direct correlation on development of successful products and services. If women drive the majority of the purchasing decisions, their insights need to be heard at the board room level.
3. Challenge the old model of group thinking. Realize one and done is not enough. To have one woman on your board only means there’s more work to do. According to Harvard Business Review, at least three women need to be on a board to change board room dynamics.
4. Enhance the bottom line of your company with women on the board. Celebrate board room game changers (boards that have 50/50 gender representation) with a goal to replace every retiring board member with a woman. Partner with organizations that are helping to get women on boards like Carolyn Chin’s On Board Boot Camps. This is a great first step to expand your playing field of women leaders.
5. Research shows companies with more women on boards deal more effectively with risk. Gender-balanced boards are associated with better corporate social performance. Data from Catalyst and research from Harvard Business School indicates that how a company behaves plays a central role for brand and risk management and could mean the difference between supportive or hostile stakeholders in this age of the activist investor and consumer.
Gender-balanced boards are just better for business.