It Pays to Put Women on the Board
It Pays to Put Women on the Board
By Joe Solmonese
Before I joined forces with Ted Gavin to form Gavin/Solmonese, I spent twenty years working for social change in the political realm. A big chunk of that time – 13 years – was dedicated to promoting gender diversity in political leadership through my positions at EMILY’s List.
EMILY’s List helps elect women to the U.S. House and Senate, as governors, and to positions in state and local government. For thirty-one years, they have demonstrated that government works best for all of us when it looks like all of us. And, since women make up more than fifty percent of our country’s population, it stands to reason that having women in positions of leadership makes a real difference in terms of the issues that are raised, the views that are represented, and the laws that are passed.
This is the perspective I bring to bear on my work advising corporate clients at Gavin/Solmonese. I firmly believe that whether you are debating a bill in Congress or discussing ways to increase your share of diverse markets, having women at the table makes a vital difference.
Representing key stakeholders
As employees, shareholders, or customers, women are key stakeholders in your success. If the people in the market for your product or services do not see anyone who looks like them in a leadership position, they are liable to look elsewhere.
A lack of women in senior management or board positions may communicate to female employees a lack of upward trajectory in your company. This will affect their loyalty, commitment, and ultimately, the longevity of their employment. If employees leave, for whatever reason, you lose the investment in their productivity and institutional knowledge, and incur the cost and disruption of having to train new employees. That pain is exacerbated and unnecessary if it happens because a valued employee left because she perceived an impassable glass ceiling. Pretty soon, you’ll start to fall behind other companies that truly value diversity, companies that set goals and genuinely work to meet them, and companies that believe they can solve problems better and faster if they take into consideration more diverse viewpoints.
According to 20% by 2020, a nonprofit dedicated to increasing the number of women on corporate boards, only 17.9% of corporate directors were women in 2015. Yet, they point out, “women comprise about half of the total U.S. workforce; hold half of all management positions; are responsible for almost 80% of all consumer spending; and account for 10 million majority-owned, privately-held firms in the U.S., employing over 13 million people and generating over $1.9 trillion in sales.” That’s a lot of stakeholders to ignore.
Some countries require corporate boards to reserve a certain number of seats for women. In Norway, for example, women must comprise 40% of company’s board. In the U.S., our solution must come from within. Boards have to WANT to diversify. It falls to corporate leaders to initiate change. And they – you – must be more aggressive if we’re ever going to come close to parity. According to the 2015 Spencer Stuart Board Index, women’s share of seats on S&P 500 company boards went from 15% in 2005 to 20% in 2015. That is not a very rapid rate of progress.
Who’s on first?
Finally, a word about tokenism. Someone always has to go first. Corporate boards would do well to consider what the experience of serving on the board is like for that first person – and make it as positive as possible. That first woman, that first gay man, or that first person of color will notice things no one ever has before, simply by virtue of their perspective.
I’ve served on nonprofit boards, and I’ve seen eyes glaze over when the new person opens her mouth for the fifth or tenth time. I encourage you to resist the temptation to dismiss her as someone who doesn’t understand how “we” do things. Make the affirmative assumption that she has a point. If you demonstrate that you sincerely value her perspective – that you are not just paying lip service to the idea of gender diversity, but that you asked her to serve because you believe she matters – she will sense your commitment and contribute her fullest. And you, in turn, will find it easier to recruit a second woman, and a third, and a fourth to serve on your board.
One thing is for sure: by making a commitment to gender diversity, the size of the talent pool you can choose from automatically doubles. For that reason alone, it’s a smart move.
As long as women are among the people you are trying to reach and/or represent, I urge all of you to recognize the value of having women’s voices in your board room. And not just to achieve an arbitrary quota – but because your business will thrive if you take into consideration the full view of the marketplace.
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