A BLOG POST BY STEPHENIE FOSTER On September 16, I attended an exciting day-long forum on closing the gender gap on corporate boards. The forum was hosted by the Johns Hopkins University School of Advanced International Studies (SAIS) and was the brainchild of Susan Ness, a Senior Fellow at the SAIS Center for Transatlantic Relations and a former member of the U.S. Federal Communications Commission (FCC). The forum brought together experts and advocates to discuss global strategies for accelerating the inclusion of women on corporate boards and to examine the impact of women’s participation in the boardroom. I can’t capture everything that was discussed; you can find the full agenda and a videostream at http://transatlantic.sais-jhu.edu/events/2010/gender_conf.htm
To set the stage, according to Catalyst, www.catalyst.org, only 15.2% of Fortune 500 board members are women, and most of them are white women. Governance Metrics International’s statistics were global. Its research found only 12.2% of US board seats were held by women. In contrast, it found in Norway, 34% of board seats are held by women, Sweden (23.9%), Finland (23%) and the Philippines (19%). In the UK, 8.5% of board members are women.
This issue of increasing the diversity of corporate boards and adding women’s expertise is catching on globally. Norway has led the way, passing pioneering legislation 2003 that requires 40% of board seats be held by women (the deadline for state-owned companies was 2006 and for public companies was 2008), with the penalty of dissolution for failure to comply. Spain has also passed legislation requiring 40% of board seats be held by women by 2015, and Iceland requires that companies with 50 or more employees have a 40% women directors by 2013. France is currently debating a bill phasing in a 40% quota by 2016, while Belgium, Britain, Germany and Sweden are considering legislation. Rather than adopting a mandatory quota, Australia approached diversity by getting an advisory board to the Australian Stock Exchange (ASX) comprised of the titans of commerce to adopt and execute a comprehensive program to increase the percentage of women on boards, including one-on-one CEO mentoring with a board-ready woman; offering scholarships for board training programs, maintaining a roster of board-ready women, and annual monitoring of results. Companies must set targets and comply or explain why not. In anticipation of the effective date of the monitoring, the percentage of women among the class of new board members jumped from 8% to 25% in one year.
There was so much information and lively discussion. To me, the most interesting discussions focused on the impact of women on boards. Some early research has found that Fortune 500 companies with higher percentages of women board directors on average financially outperform companies with low percentages of women on boards. Additionally, Professor Diana Bilimoria from Case Western Reserve University (in Ohio) presented her research that companies with more women on boards also have more women in senior management positions, and that women board members are more likely to champion tough issues in board decision making.
In these times of economic uncertainly and globalization, boards are critical to strategic decision making and increasing competitiveness. I came away understanding that more work needs to be done, but that increasing the number of women on boards is critically important. I was also encouraged that women board members are having an impact.