Tag Archive for: women on boards

Op-Ed: NextUp for Women Board Members – What’s your Plus One?

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NextUp Women BoardI recently attended a breakfast for 150+ women board directors hosted by Julie Daum, leader of Spencer Stuart’s North American board practice, to listen to the findings from their 2023 S&P 500 New Director and Diversity Snapshot. The findings and discussion that followed were energizing and sobering. Some specific findings that struck me were the progress of women directors in the S&P 500 over the past decade. Almost half–45% percent–of the class of 2023 were women, a 92% increase over the past decade. Women now account for 33% of S&P 500 directors, an 83% increase from a decade ago. An astounding 67% of the 2023 class identified as diverse candidates. Once the audience stopped high fiving one another, Spencer Stuart went on to outline some more sobering trends.

Among the top ten priorities for board selection, gender diversity dropped from top to #8. Hiring candidates with proven enterprise operating experience now topped the list. And there are significantly more males than female with proven enterprise operating experience. If boards are prioritizing traditional skills and capabilities – the pool of women candidates is now smaller. Will all the progress advancing women into board positions now decline?

Maybe not. First, remember that there are exponentially more opportunities for directors beyond the S&P 500. Hundreds more. And if we add private equity boards and startup companies, these opportunities are in the thousands. While competing for board positions will always be competitive, if you broaden your pool and extend your network beyond a traditional set then you might find some interesting opportunities.

I have had the privilege of serving as an independent director on two private equity boards owned by companies, Altamont Capital Partners, and The Riverside Company. I currently serve on a public company board, Cantaloupe, Inc. (NASDAQ: CTLP), and I am a non-voting board member of NextUp where I serve as chief executive officer. NextUp is the premier nonprofit member association firmly focused on developing the pipeline of future women leaders. Women reach out to me to find out how I was able to land these directorships. And as a woman whose day job is helping women advance in business, I am more than happy to offer a few words of advice.

First, think about how your specific skills might give you an enormous competitive advantage. Define your advantage as your “Plus One.” I landed my first board position on a private equity (PE) board looking for a woman + Olympic licensing experience (that is a pretty short list!). But this company was the leader in design and manufacture of gymnastic apparel. What is your Plus One? If it is Artificial Intelligence, your phone will be ringing off the hook! How about experience in direct marketing or membership? I am going to bet that pharmaceutical companies engaged in serving millions of consumers purchasing weight loss drugs are going to be looking for women with a Plus One in CRM.

Which brings me to my second most important piece of advice.

As a board member, your job is to “govern” not to “do.” The quickest way to derail a healthy board discussion is from the rookie who thinks they are on the board to do the job of the management team. They are not. The exception is your role on the board committee. Your finance or accounting degree is going to look attractive to a board looking for someone to serve on Audit. Your HR background will make you a stellar match for Compensation. But, as an independent director, you are there to advise, support and evaluate. Conversely, if rolling up your sleeves and diving in is your gig, then a private equity opportunity may be the right match for you. PE boards prioritize subject matter expertise and are willing to take a risk on those with broad experience, but with a more junior title. They value seasoned pros who lean in on projects. Or have an unbelievable rolodex to help the company. Making a personal investment might be a way to further underline your commitment to the board.

Finally, board positions—private and public—are rare. There are a number of other opportunities where you can gain experience, satisfaction, financial reward and valuable experiences. Right now, as CEO of NextUp, I am fulfilling one of the most satisfying career goals by developing thousands of the next generation of women business leaders. For two-plus decades, NextUp has been partnering with corporations to provide opportunities that build capabilities for the next generation of leaders. And I am certain that more than a few of these will end up in the boardroom.

By: Lisa Baird is the CEO and board member of NextUp, the nonprofit that advances all women in business, and serves on the Board of Directors for Cantaloupe, Inc., a digital payments and software services company that provides end-to-end technology solutions for self-service commerce, and which is recognized as a “Champion of Board Diversity” by the Forum of Executive Women for three years in a row. Cantaloupe is proud to have 44 percent of its Board women. Lisa previously served on the boards of Elite Sportswear and Fox Racing, now a subsidiary of Revelyst.

(Guest Contribution: The opinions and views of guest contributions are not necessarily those of theglasshammer.com).

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Gender diversity – lessons from the UK boardroom for 2016

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BoardRoomBy Nneka Orji

A mere five years ago in early 2011, few of us would have looked to the UK Public Limited Company’s boardrooms as beacons of gender diversity. Female representation in FTSE 100 boardrooms was just 12.5% and although many leaders in business and politics acknowledged that something had to be done, it was not clear what or how. Five years on now in 2016 women now fill 26% of FTSE 100 board roles – just over double their representation when the Davies Review (Women on boards) was launched. If we didn’t know before, we certainly now have a better idea about what it takes to turn the dial on this opportunity.

The Davies Review proved a successful catalyst for gender diversity in UK boardrooms; with a clear target and public commitment from senior leaders to achieve at least 25% representation over the course of five years, board directors were incentivised to proactively address unconscious bias in board selection and nomination processes among a number of other obstacles female leaders face on their journey to the boardroom.

Yes there has been progress – which we should be proud of – but it’s by no means time to congratulate ourselves. While a number of organisations now have female representation of 25% or more on their boards, some industries have a way to go. As identified by the New Financial’s most recent report, UK-regulated financial services companies have more work to do – both in the boardroom where women fill 23% of roles and in executive committees where they fill only 14% of leadership roles.

The Davies review focused on listed organisations, with the aim for other non-listed organisations to adopt the recommendations, so it is no surprise that more progress has been made by UK-listed companies. Unlike the boards of listed companies, only 14% of board positions of privately held financial services companies are filled by female board directors. For those still not convinced by the widely discussed benefits by advocates of gender diversity, why not consider what board directors have experienced as a result of enhanced diversity?

Chairs and board members say this isn’t just a nice-to-have; they continue to see the value of more diverse boards in the richness of board discussions particularly when it comes to making critical decisions, and they are less likely to be hit by scandals. In the current business landscape with increasing scrutiny of boards and greater focus on the importance of business’ role in society, surely this is welcome news? From a commercial perspective it also makes sense; research conducted by the index provider MCSI found that companies with more women “delivered a 36% better return on equity since 2010 than those groups lacking board diversity”.

The US may also do well to consider some of the progress achieved in the UK. According to the recently published “2015 Catalyst Census: Women and Men Board Directors”, female representation across S&P 500 stands at just 19.9%. Of even greater concern is that the glacial pace of change is likely to continue given new directorship appointments, of which 73% were held by men and 27% by women. Deborah Gillis, CEO’s President and CEO, stated; “Our new Census shows little progress has been made at the board level, and even less progress has been made in the pipeline for women officers and directors—suggesting women are nowhere near the path to parity with men. Men continue to be overrepresented, holding more than their fair share of board seats and, in some cases, all the board seats.”

The New Financial’s report also points to exemplary countries which others should aspire to – including countries in the Nordic region, France and Germany where female representation is 34%, 29% and 27% respectively.

These reports and others point to the merits of diversity and encourage leaders – both in business and government – to take bold action. What does bold action look like?

In the UK, the government commissioned the Ghadia Review which sought to make specific recommendations for UK financial services organisations to address gender diversity at both board and executive level. The Review recommended clear targets and enhanced transparency (including the disclosure of diversity data), increased accountability across all leadership levels within organisations, and the linking of remuneration to progress against gender diversity targets. New Financial found that only 26% of the financial services organisations included in the research sample disclosed gender diversity targets – and of these only 10% disclosed gender representation at board level, and 24% setting targets with deadlines.

It’s not enough to talk about gender diversity – it’s a case of committing to specific goals and maintaining the focus required to deliver against the goals. While aspirational targets show some level of acknowledgment of the need to address gender diversity, being specific and time-bound is more likely to have the desired impact. The Ghadia Review recommends 12 data points, including gender ratio of employees promoted and the percentage of maternity, paternity and shared parental leave returnees.

Just as importantly, targets need to be stretching. One of the five recommendations in the “Davies Review Five Year Summary” was around increasing the female representation target for FTSE 350 Boards to 33% – continuing with the voluntary approach. Incremental progress will only result in the next generation having the same debates we are having today. We owe them more.

To build on the progress made to date, we must look to the next generation of aspiring board directors, the behaviours we advocate and development opportunities we provide to both women and men. According to New Financial, women are better represented (36%) in support roles, but continue to be very under-represented in the roles that serve as springboards to board positions – CEO (6%), other C-suite roles (10%), and budget owners (9%). Without losing momentum on progress being achieved in the boardroom, there is a clear need to focus on female representation at the executive level.

This doesn’t just apply to Financial Services – although particularly acute in Fintech. According to a recent Deloitte report including participants across the globe, boards of financial services organisations in the UK lead manufacturing, and energy and resources industries.

Despite what many would deem as slow progress by boards in terms of gender diversity, it turns out that we have some positive lessons to learn from boards if we are to turn the dial on female representation at executive level: specific targets, enhanced transparency, public commitment, and role modelling desired behaviours.

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Why Talk is Expensive When it Comes to Boardroom Diversity

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Business meetingIf you’re tired of seeing headlines about the financial advantages and growth opportunities that women executives in the boardroom could deliver to businesses, maybe it’s time we flip that conversation on its head.

As much as highlighting the potential that companies could realize if only women were in the decision room, recent findings quantify the tremendous losses that companies are bleeding right now by their absence. The lack of women in boardrooms and executive positions is, plain and simple, being identified as self-sabotage for organizations.

Male-Only Executive Boards Create an Opportunity Cost

Recent research by Grant-Thorton has revealed that the opportunity cost for companies with male-only executive committees in the S&P 500, FTSE 350, and CNX 200 across the US, UK, and India was a whopping US$655 billion in 2014, and US $567 billion in the US alone, or 3% of GDP. The loss results from lower return on assets.

It turns out that talk is not cheap. When it comes to gender diversity at the executive level, talk alone is very expensive. (As is “action” that is PR-strong but falls short of robust follow through on outcomes.)

Only 35 of US S&P 500 companies have at least one woman executive in the boardroom (a far lower ratio than UK or India), but those companies with female executive presence on the board outperformed the all-male executive majority by 1.91%.

Francesca Lagerbeg, global leader for tax services at Grant Thornton said that corporate culture “kick(s) the can down the road” when it comes to board diversity not because they don’t know it’s necessary, but out of short-term fears of what it takes to implement real change.

“These companies are suffering now,” Lagerbeg says. “A lack of action now will make it all the more difficult to respond in the future when both problems are likely to be more acute.”

Executive Women in the Boardroom Equal Better Decisions

What’s noteworthy about this study is it hones in specifically on the presence of at least one female executive within the boardroom, holding female non-executives aside, as plumping up boardroom statistics mostly with female non-execs (UK) still leads to power imbalances on decisions.

“The research clearly shows what we have been talking about for a while: that diversity leads to better decision-making,” said Lagerbeg. “We only looked at listed companies in three markets and the figures are compelling. Now imagine extrapolating the results for all companies globally.”

The International Monetary Fund (IMF) recently asserted that more women on the boards of financial institutions leads to stability. Iterating opportunity cost, the IMF report states, “Women’s financial exclusion limits the growth-promoting potential of finance and it may also prove costly in terms of lower financial stability.” The authors wrote “…on average, stability is significantly higher in banks with a higher fraction of women in the board of directors.”

Research has also demonstrated that companies with a compelling track record of promoting female executives consistently perform better across 18 measures of profitability.

Despite This, Gender Parity Is A Long Way Off

It’s contrary to the nature of businesses not to evolve when compromised operational strategies lead to loss, but that’s happening on a macro level.

It will take 28 years to achieve gender parity in the boardroom at the present rate of change and that’s not even specific to executive seats.

Forbes contributor Sabina Nawaz asserts that real change will take more than current low levels of consistent jogging towards an abstract goal. Nawaz argues it takes real intensity, including: honest assessments of the presence of women in leadership roles, programs to meet quantifiable metrics by a determined date, and transparently published results. But too many companies are still talking and denying instead of committing.

What If You Don’t Want to Wait?

What about women who want a board seat and don’t want to wait until 2042 before it might be fair game? What about women who don’t want to wait for their company to catch up to the business impact of her voice?

Slow progress is not the same as no progress. This year, there are 11 women executives that are new to Fortune’s 2015 list of Most Powerful Women. Women are gaining ground on leadership positions within boards as well as representation on the committees that select new members.

Just because many companies are self-sabotaging their growth does not mean you have to do the same. If you want a board seat, beginning to make your bid is far better than biding your time until it’s easier to do so.

Forge Your Connections

Develop your connections to existing board members and seek sponsors. The recommendation of board members is the strongest factor in new member selection. If you don’t know the board, it’s unlikely they know you. Take the risk of going beyond your comfort zone with connections.

Be Visible

Janice Ellig, chair of the Corporate Board Initiative of the Women’s Forum of New York, recommends to “pat yourself on the back in a very visible and confident way.” Ellig advises women to “value their ambition” and “stand up and make it known” that you want a CEO or board position.

Actively Seek

Jan Babiak suggests that since 70% of board roles are attained through existing board/management networks, it’s important to cast wide. Connect with high-level professionals outside of your immediate field of work because opportunities may be found where you’re not looking.

All in all, it’s a wake up call to companies: Waiting for gender executive diversity to get easier? It’s a strategy that is costing you.

By Aimee Hansen

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Biotech: Where are the women on boards?

team-meeting-in-office-5lThe biotech sector lies at the center of several different forces shaping the economic landscape: companies originate in the halls of academia, they maintain close relationships with the pharmaceutical industry, and because of the capital intensive funding model associated with the industry, they are subject to a number of influences from venture capitalists as well. As a smaller industry, with approximately 2,300 companies in the U.S., biotech offers sharp insight into how niche industries are seeking to bring about fast changes in the number of women present in their board rooms and directors’ meetings. Since 52% of US biotech companies maintain all-male boards, the numbers are clearly painting a picture; women are not being invited to the table.

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Global Percentage of Women on Boards Rises Slowly

iStock_000016909333XSmallBy Melissa J. Anderson (New York City)

Recently released research by Thomson Reuters shows that the percentage of women on boards is rising incrementally around the world. Based on the firm’s database of 4,100 firms, the majority of companies globally have at least one woman on their board.

In 2012 (the last year for which there was data), 59 percent of companies employed a woman board director. But it’s not all good news – that percentage has only risen by three percentage points since 2008, and it didn’t increase at all between 2011 and 2012.

The report [PDF], entitled “Mining the Metrics of Board Diversity,” shows that companies with women on their boards tend to outperform those with no women in terms. They also track better in relation to their index benchmark. Companies with no women have more tracking errors, the report shows, which means those firms may be more volatile.

By now, it’s old news that companies with women directors tend to do better than those without. Andre Chanavat, Product Manager, Environmental, Social & Governance (ESG) at Thomson Reuters, and co-author of the report with Katharine Ramsden, Global Head, Thought Leadership at Thomson Reuters, stated, “This study suggests that the performance of companies with mixed boards matched or even slightly outperformed companies with boards comprised solely of men, further reinforcing the idea that gender equality in the workplace makes good investment and business sense.”

But, as the report shows, while the majority of companies in the study did have women board directors, very few companies had more than one token women. Approaching a critical mass of three or more women on these boards is the result that many companies will still have to keep working toward.

Chanavat said, “Over the past five years significant measures have been put into place to help increase equal opportunity and diversity and while there has been a gradual increase in the percentage of companies that have women on boards, there is still a long way to go.”

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Opportunities Abound for Shareholder Activism on Gender Diversity

Group of businesspeople having a meeting.By Melissa J. Anderson (New York City)

By now, the connection between women and business success is well-known. But as many times as studies have linked diverse boardrooms with better performance, companies seem to be making few moves toward gender balanced boards.

This spring, Deloitte released the third edition of its report, “Women in the boardroom: A global perspective,” which detailed the excruciatingly slow pace of progress in boardroom gender balance. Despite rapid elevation of discussion on the topic of boardroom diversity, action has been slow. Even in places like the UK, which initially put a concerted effort behind hiring more women to FTSE 100 boards, hiring of women to director seats is plateauing.

Deloitte believes that it may be possible to speed this process up. Up to now, relatively few shareholders have gotten involved in efforts to change the gender balance on the boards of the world’s largest companies. Dan Konigsburg, managing director of the Deloitte Global Center for Corporate Governance, Deloitte Touche Tohmatsu Limited, comments, “Given that shareholders are the owners of the company, one might expect they should have the strongest interest in the benefits of more diverse boards, an interest that should benefit the value of their portfolios.”

So far, Deloitte says, there have been very few shareholder proposals addressing diversity in the boardroom. This is a mistake, Konigsburg says. “We see diversity as a business issue. …We also believe that greater diversity – not just in gender but in background, in experience and in diversity of thought – makes for more effective teams of people.”

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