Using your Vote for Change: Women in Public and Organizational Leadership
Why should you care about board composition? Boards of directors make decisions that can impact you, your community, and the country. That’s why it’s important that membership on corporate boards be representative of a company’s constituents. Boards of directors choose CEOs. They make decisions about executive compensation, whether to buy, sell, or merge with other companies, where corporate offices close and relocate, and how much priority a company gives to issues other than profits, such as social responsibility.
Good corporate decision-making requires the ability to hear and consider different points of view, which comes from people who have different backgrounds, experiences, and perspectives. Companies that have women directors and executive officers lead by example. They send a clear message that they value diversity of thought and experience. Advancing women to positions of leadership is smart business.
Here are a few things to consider when it comes to a Board of Directors:
- Diversity of Thought: Women on boards bring different perspectives to the difficult issues facing today’s corporations. It is widely believed that diversity of thought results in better decision making.
- Stakeholder Representation: The makeup of corporate boards of directors should be representative of the company in which it governs: shareholders, employees, and customers.
- Competitive Advantage: A diverse board is better positioned to thrive in today’s global economy where the pace of change is accelerating and rapidly changing economic realities require nimble, strategic and well-informed directors.
- Availability of Essential Skills: Senior women executives offer the skills and experience that most boards need, including industry knowledge, operational experience, and functional expertise.
As of right now, there is a huge, untapped pool of talent.
Women hold just a small number of corporate board seats. In 2015, the 2020 Women on Boards Gender Diversity Index of Fortune 1000 companies showed that 17.9% of corporate directors were women. This is a small number when you consider that: 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.
It is time that companies took advantage of this untapped pool of qualified board candidates. It’s time that we increased the number of women who serve on corporate boards.
There is a strong relationship between the gender of a company’s key leaders and the diversity of its board of directors. Women account for 49 CEOs, 37 Board Chairs, and 158 Nominating Committee Chairs in the Fortune 1000. Compared to their male counterparts, women in these roles are much more likely to oversee gender diverse boards.
In fact, boards headed by women far exceed the national average of 17.9% women per company board. Female CEOs, Board Chairs, and Nominating Chairs have an average of 30.0%, 27.7%, and 23.1% women on their boards, respectively, while men in these positions trail at 17.3%, 17.6% and 17.2% women. While we cannot speak to causation, there is clearly a strong positive correlation between women in leadership positions and gender diversity on boards.
To close, here is a question to contemplate. And please, consider answering the question in the Comment section. I’d love to hear from you!
- In what areas of interest could you expand your voice by joining a board or committee? Name three.
Here are a few resources for you to find board openings:
Linkedin.com (search “board member” under the Jobs tab)