The gender gap on U.S. public company boards continues to grow yet female directors agree with their male counterparts that quotas or such “silver bullet” solutions as requiring three women on a board are not the answers, according to two recent surveys.
However, they do agree that “fresh perspectives on the board (including the value added by competent women candidates) and leadership indicators (rather than regulatory or legislative tweaking) are more likely to improve shareholder trust and confidence,” Elizabeth Ghaffari, founder of Champion Boards, a service of Technology Place, and a director herself, wrote me in an e-mail today.
The data she was referring to is included in the 2010 Board of Directors Survey sponsored by the executive search and advisory firm Heidrick & Struggles and WomenCorporateDirectors. Although 25 percent of the female directors and 1 percent of male directors queried believe there should be a quota requiring a specific number of women on every board, a strong majority of all directors were against that idea (59 percent of women directors and 93 percent of men directors). [Reader the report and the Pensions&Investments Online article.]
“Even though the headcount of women surveyed outnumbered men 2 to 1, the results surprisingly were in harmony,” Ghaffari said. “Women and men alike voted strongly against quotas and against the presumption that simplistic solutions like three women directors make magic happen on a board.”
The Heidrick Struggles/WCD Survey does offer up one positive observation regarding women directors going forward: “This changing dynamic [women directors penchant for being more assertive] will likely usher in a new era of governance and perhaps more significant changes for U.S. companies and their boards over the next several years.”
The WCD Co-Founder and Co-Chair Alison Winter pointed out the significance of the survey findings regarding quotas.
“It is interesting to see in the survey and in our conversations with women directors around the world how the idea of quotas is gaining traction,” Winter said, “especially given what is happening in Europe, where various countries are moving toward new regulations that require anywhere from a 20 percent to a 40 percent female quota in the boardroom. This alone raises the consciousness of nominating committees around the subject of diversity when considering new board candidates.”
The Heidrick & Struggles/WCD survey, which was conducted from February–June 2010, garnered responses from 398 people, 294 of which were female directors and 104 who were male directors.
Ghaffari, who is the author of the book Outstanding in their Field: How Women Corporate Directors Succeed from Praeger/ABC-Clio, says the results from the study are in line with her own research. “Those findings support my research conclusions that it is top quality directors working at peak collaborative performance that really is the key factor in making boards and corporations do the jobs they need to do,” she said.
Additionally, the survey found that “women directors appear to be more assertive on a number of hot-button issues, including evaluating their own board’s performance and supporting more oversight on boards.”
Meanwhile, other research continues to show just how far U.S. women directors have to go in order to be on more equal footing with their male counterpart on boards. For the first nine months of this year, 164 women have been named to boards, which puts them on a pace for 219 for the year, according to Champion Boards. That is significantly less than each of the last four years, where there has been an yearly average of about 270 new women directors. The irony is that the negative trend comes on the heels of the new SEC disclosure rules that focus on diversity, which went into effect on Feb. 28.
“The key question is whether September data suggests that boards have figured out how to handle the ‘new normal’ and can once again bring new and diverse talent on boards,” Ghaffari writes in her Women on Boards – September 2010 newsletter.
Internationally, the story is not a good one for women directors. Other than companies in such countries as Norway and the Netherlands where quotas are in place or are about to be implemented, many do not have women directors on their boards. According to the Corporate Women Directors International 2010 Report: Women Board Directors of the 2009 Fortune Global 200, 45 of those companies do not have a single woman on their board and only 12.2 percent of those companies have women on their boards. On the other hand, 77.5 percent of those 200 companies have at least one woman on their board.