Susan Keating, CEO of Women Corporate Directors Foundation, on what it really takes to get more women onto corporate boards.
Every leadership team today knows that constant transformation is essential to survival. Companies are prepared to replace entire technology systems, restructure their global workforces, and throw out sacred business models as part of this transformational activity. Yet despite a willingness to make monumental – and even painful – changes in these areas, one part of the organisation has remained relatively unchanged compared to the world outside: the boardroom.
Globally, boards have remained significantly male-dominated, with only incremental progress being made towards a more gender-balanced boardroom. In S&P 500 company boards in the US, 24 per cent of the directors are women, while the number is just under 29 per cent in the FTSE 100. Germany has a similar story: on the supervisory boards of the 424 largest public companies there, women represent less than one third of the seats (29.7 per cent).
Among companies in the Tokyo Stock Exchange’s First Section, women hold just over 10 per cent of the board seats. Singapore’s top 100 primary-listed companies have 13.1 per cent female representation on their boards. Across Latin and South America, the percentage of board seats held by women is 7.2 per cent. The numbers are increasing, but progress needs to move much more quickly.
Best-practice boards are making progress. Understanding their fiduciary duty, many boards and their nominating committees have been slating women directors. Numerous pieces of research in the US and other countries – from MSCI, McKinsey, Harvard Kennedy School, and more – have shown the link between having more women on board and stronger financial performance, better oversight over underperforming CEOs, and greater employee productivity growth.
Although the business case for having more women on boards has been well documented over the past decade, progress toward more gender parity is not happening fast enough. WCD recognises that more specific actions are needed to get more women onto boards, and support them once they are there. In a number of countries, of course – including many in EMEA, but also India, Malaysia and others – the government has taken the matter into its own hands, establishing quotas for the number of women that companies must have on their board. WCD members’ opinions on quotas run the gamut – from actively supporting and writing the legislation, to ardently standing for deregulation – and so WCD as an organisation does not take a firm stance on quotas per se. However, WCD supports efforts of all members focused toward increasing gender parity in the boardroom.
There are in fact many tools that can be used to drive gender parity in the boardroom, and it will take executing effectively on a number of these to get to where we want to be. Having 2,400 members – the vast majority of whom serve on large publicly-traded or private company boards, spread across six continents – means that we are aware of the common challenges that women directors everywhere face today.
"Although the business case for having more women on boards has been well documented over the past decade, progress toward more gender parity is not happening fast enough"