Why CEOs Need to Make Gender Diversity on Boards Happen
With greater gender diversity on a corporate board, comes better performance. Opinions differ as to why, but myriad research studies from leading academic institutions and the private sector all make a compelling case for more balanced gender representation on boards. The debate should be long over, yet women’s presence on U.S. corporate boards remains frustratingly, persistently low.
According to the 2012 Catalyst Census: Fortune 500 Women Board Directors, women held 16.6 percent of board seats in 2012 and 14.3 percent of Executive Officer positions. Ten percent of Fortune 500 companies have no women on their boards. Zero. As one Fortune 500 CEO recently put it, these results are “dreadful and surprising”.
At the second biennial Breakfast of Corporate Champions hosted earlier last month by the Women’s Forum of New York, in partnership with the Committee for Economic Development and the National Association of Corporate Directors, corporate leaders in promoting board level gender diversity were celebrated. A CEO panel also provided a number of practical, tangible recommendations and several of the CEOs made firm commitments to action. Among the recommendations:
Tackle the Supply Side; Broaden the Pool
The most commonly cited barrier to progress with gender balance is the lack of appropriately qualified, ‘Board-ready’ candidates. If one has a narrow focus on former or current CEOs as most attractive candidates then this naturally limits the talent pool. Part of any longer-term solution has to address the gender imbalance in the pipeline of Executive level positions. The immediate and obvious solution is to broaden the pool, looking for qualified non-CEO, C-level candidates as prospective Board candidates. There are now a variety of organizations with databases of CEO-proposed, Board-ready female candidates available to nominating committees and search firms at no cost.
Some Boards are beginning to ask for a diverse candidate slate as a pre-requisite. However, even among these enlightened companies, more effort is often required to ensure the offered slate is diverse. It cannot be a box-checking exercise. Several CEOs said that Nominating Committees needed to get comfortable with repeatedly sending a candidate list back to the search firm, if it does not include the appropriate, requested diversity and quality mix.
Sponsorship vs. Mentorship
Consensus on the panel was that CEOs are the key and there is an opportunity and requirement for them to do more. It’s not just about mentoring candidates; it now requires active ‘sponsorship’ to make the difference. The perhaps uncomfortable truth is that, based on the current numbers, male CEOs have the most critical role to play in sponsoring candidates to drive real Board consideration. Given the relatively small world of U.S. corporate leadership, if every Fortune 500 CEO were to identify and recommend to their peer network at least two women from their leadership team as Board-ready, the impact would be staggering and irreversible. As to the potential challenge of finding board openings for this potential onslaught of new candidates, one CEO’s suggested solution was simple – enlarge your corporate board by one seat to make room.
The Road to Hell is Paved with Good Intentions
If board diversity is truly a strategic imperative for a company, then it requires purposeful action. Behavior has to match statements. Consumers and institutions increasingly punish those with a visible disconnect between what they say they believe and their actual behavior. According to the findings of a recent survey by Hill+Knowlton Strategies, nine out of 10 Americans believe that companies need to do more to bring their behaviors in better alignment with their publicly stated values, and nearly half of Americans think that companies’ behaviors are out of alignment with the values they publicly promote.
Diversity in an organization is a business outcome that requires a formal plan with targets, identified responsibility for results, measurement of progress and clear consequences of success or failure to deliver.
The message is clear; visible leadership and commitment is required on this matter. No one claims this is going to be easy. But as Deanna M. Mulligan, President and CEO, The Guardian Life Insurance Company of America summed up: “We put a man on the moon; we should be able to put women on boards.”
Quite so. Over to you CEOs.
Ian W. Bailey is EVP and GM with Hill+Knowlton Strategies, a global strategic communications firm. H+K Strategies conducted its study on “Communicating Character™,” based on 3,000 online interviews among U.S. adults, between Oct. 11 and Oct. 21, 2013. H+K Strategies supports the Women’s Forum of New York, through pro bono communications for its corporate board initiative, including its biennial Breakfast of Corporate Champions which was held on November 21, 2013 in partnership with the Committee for Economic Development and the National Association of Corporate Directors.