QWhy do corporate boards still lean so heavily toward men?

answered April 13th, 2012 by Dr.Nancy McInerney-Lacombe
A

The conversation regarding the dearth of women on corporate boards used to make me angry; it now just disheartens me. The CEO quoted in the Leah Eichler article is absolutely right. The talent pool of qualified women is enormous, yet the statistics of women on boards remains stagnant wherever you look. We think we know what the problem is – old white haired Caucasian men in dark suits. Yet, that explanation is too simple an answer for such a complex issue. The problem relates not only to women; it’s about minorities in general. How many black, Asian, Indian, Native Canadian men are on our corporate boards? The issue is exclusion. While all the research in the world will tell you that diversity adds value to any group – that differences including gender, race, religion and sexual orientation stimulate an expanded discussion of issues leading to better decision-making – the existing board culture is too narrow to include anything other than like-mindedness. Why is that? It is because diversity also promotes not only broader discussion, but that discussion may include heated debate over very tough issues as the diverse points of view collide which is an anathema to the collegial atmosphere that most boards covet. In addition, I suspect that if CEOs and Board Chairs were totally honest with us, they might admit they are not sure they have the skills to manage a diverse board effectively. They have never had to. Building consensus on an issue in a diverse environment can be tough slogging. Is it worth it? Yes, the research confirms it is. Do shareholders deserve the effort? I believe so.

 

So, how do we fix the problem? Well, most notably since Earle McLaughlin said in 1976 that there wasn’t a qualified woman in Canada to serve on the Royal Bank Board, there has been progress, albeit at a snail’s pace. A few months ago the National Post reported that the Institute of Corporate Directors’ town halls and member survey concluded that diversity was a good thing BUT don’t make it mandatory. The messaging here is wait it out. The “old boys” will die off. Women will continue to climb the corporate ladder and make board postings more accessible. But we have been saying that for years. I believe this argument is meant to appease, not to solve the current inequity. Is it time to move to quotas? Many free marketers shudder at the thought, myself included. However, think back. The US instituted Equal Opportunity legislation in the 60’s addressed at all minorities, including women. This morphed into Affirmative Action targets in Corporate America a decade or so later. I was in HR at the time in Canada and the general reaction of the executive team was – we had better do something about this or, God forbid, the government may legislate us into it. In the 70’s select Canadian corporations began to institute new training programs specifically targeted at promoting more women into management. Many mistakes were made with some careers ruined as selection processes were not finely honed and arguably gravitated to a path of least resistance – put bums in the seats of these new programs. Yet, in my experience, there were many successes which makes me ask myself could quotas work at the board level? What are we afraid of? The Norwegian experience as a first mover in legislating a 40% female participation rate for public company boards may shed some light. Surely, it can’t be all bad as the StarTribune press reported in early March that quotas are under consideration in the EU. Viviane Reding, the EU’s Justice Commissioner, said that at the current rate it would take more than 40 years to reach a 40% female board participation rate in Europe’s publicly traded companies. Reding also said she doesn’t like quotas BUT it may be a good way to create change in the short term.

 

Dissecting the Norwegian experience with the 40% gender rule offers valuable lessons. Firstly, Norway’s attempt at voluntary compliance by 2003 failed. Significant opposition from business to the government imposing restrictions on board composition forced the government’s hand bringing the rule into law in 2006, offering a further 2 year transition. Unlike Finland which moved to limits voluntarily, maybe because they saw the writing on the wall, the Norwegian experience tells us that companies may drag their feet unless legislated to comply. Secondly, in large part the Norwegian response to selecting woman for their boards did not achieve the expected expansion of the pool of qualified female board candidates. Norwegian companies also took the path of least resistance and relied on a small group of tried and true female executives. Professor Branson at University of Pittsburgh is cited saying capable women outstripped the demand yet the same women were selected over and over again with an extreme example of one woman serving on 18 boards. This small pool of, no doubt, very capable women crowds out other deserving contenders. I believe our experience is similar in Canada where a small pool of “trophy women” are the preferred board candidates. Professor Branson, among others, suggests that a move to implementing quotas should be a slow one giving companies a very reasonable compliance deadline. If not, the establishment of quotas may backfire with the women selected as a result of this Affirmative Action isolated in the boardroom.

 

In closing, it is clear that expanding women’s participation at the board table is a complex problem. It is also clear that based on current corporate momentum, Canada will not achieve a 40% participation rate in my lifetime. We have to ask ourselves, is that good enough? My hope is that your answer is no!

 

Editor’s Note: This question was forwarded to each of the Babes.  I wanted their perspective on a recent column by Leah Eichler in the Globe and Mail which was about breaking the gender barrier in the boardroom. In her column, Leah posed and answered the same question. “So why do corporate boards still lean so heavily toward men?” You can read Leah’s column by following this link http://m.theglobeandmail.com/report-on-business/careers/career-advice/leah-eichler/breaking-the-boardroom-gender-barrier/article2364839/?service=mobile

 

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