Advertisement

Women in the Boardroom: Lots of Talk, but Little Action

Women in the Boardroom: Lots of Talk, but Little Action
From Recruiter - July 13, 2016

Weve covered why ethnic and gender diversity are important for business success, and so have most other media outlets, especially in the wake of Silicon Valleys much publicized diversity problem.

And yet, in spite of all these tough conversations, the status quo persists, especially in the boardroom and especially when it comes to gender diversity(or, rather, the lack thereof). According to Catalysts 2015 census, women are still woefully underrepresented on theboards of directors at S&P 500 companies, with men holding 80.1 percent of board seats and women only holding 19.9 percent of them. Catalyst, a nonprofit dedicated to workplace inclusion for women, also found that only 14 percent of S&P 500 companies had boards comprised of 30 percent women or more. Given that women account for roughly half the U.S. population, even 30 percent isnt much to celebrate.

Companies Are Passing Up Chances to Add More Women to Their Boards

Brande Stellings, vice president of corporate board services at Catalyst, says that part of the reason why so little progress has been made is the low turnover rates of board seats. Every year, only 8-10 percent of board seats in the U.S. turn over. Because of this, there arent very many chances to get women onto boards where they are underrepresented.

The majority of companies in the U.S. do not have term limits for their boards of directors, Stellings says. The opportunity to add a new director is very rare.

However, evenif we account for these low levels of turnover, it still seems that something more is at play here: Catalyst found that only 27 percent of new director appointments go to women, which means roughly three out of every four new appointments still go to men.

We found that, even putting aside the lack of turnover, it doesnt matter if companies arent using those opportunities to make a difference, Stellings says. We see this as a missed opportunity to make change.

At this rate, the overall ratio of women to men on corporate boards wont change very much.In fact, companies are essentially maintaining the status quo, rather than challenging it.

The Answer Lies in Changing the Compositions ofOur Talent Pools

Aside from the structural barrier of low turnover, Stellings says companies face an even bigger challenge in the quest to reach gender parity: The networks most companies use to find new directors are generally dominated by men.

Given the majority of board seats are held by men, theres a tendency to replicate what you already know and who you already know, Stellings says. The women who would be great to be on board are simply not as visible or connected to the networks the boards are pulling from when theyre making appointments.

If women were more visible in these executive networks, there would likely be more women directors. Of course, radically changing the composition of anyones executive network is easier said than done. What are peoplesupposed to dorun out and look for women they can add to their networks? That would be pretty impractical (and also a little creepy).

Catalyst believes it has a potential solution to the problem of visibility with its Women on Boardprogram. Birthed in Canada and recently launched in the U.S., the Women on Board program matchesboard-ready executive women with CEOs and board chairs in two-year partnerships. The CEO or board chairusually a man, given the demographics of these groupsfirst acts as a mentor for the woman executive by helping her to define her board value proposition and identify companies for which shed be a good fit.

Advertisement

Continue reading at Recruiter »