During the previous session on Trends in Board Leadership and Shareholder Engagement Policies – Karin Thorburn kicked off the discussion of women and corporate boards with an interesting overview of gender quotas, the Norwegian experience with quotas, and female effectiveness on boards. We headed into a breakout sessions to further discuss Women on Boards: Effect of Director Quotas. Our sessions was moderated by Karin – with a short presentations by Susan Lindenauer, Noreen Doyle, and Viviane de Beaufort. I was excited to sit in on this breakout sessions as this was the focus of my independent research this term at Tuck.
Susan Lindenauer began the session by introducing some interesting statistics on the role women play in Corporate Boards, CEO, and Executive Officer positions. While the number of women in these roles is increasing – there is still a significant gap in gender parity. In 2011, women made up only 16% of board seats in Fortune 500 companies. At the same time, less than 1/5th of companies had 25% of their seats filled by women, and 1/10th of companies had no women at all on their boards. Susan also brought extensive legal insight to the discussion – she is a lawyer and previously served as the General Counsel to the Legal Aid Society of New York and has served on 8 non-profit boards. Susan noted that legal quotas in the U.S. are constitutionally impermissible and not a mechanism which can be used to improve gender diversity. Susan noted though, that while quotas aren’t the answer – boards need to become more diverse.
Noreen Doyle followed onto Susan by discussing her own experience as a women in the financial services industry who serves on multiple publically traded company boards. Noreen noted that she is frequently asked – what is the effect of women on a board? She joked, since she’s never been on an all male board, she can’t really comment. However, while she implied that boards need to become more diverse – she believes that quotas aren’t the answer. Interestingly though, Noreen noted that she was in favor of the threat of quotas and the changes they’ve influenced in both the UK through the Lord Davies commission and in Scandinavia through proximity to Norway which has implemented a quota.
Viviane de Beaufort, a professor at ESSEC, finished off the short presentations by sharing with the breakout group her research on the relationship between women and power. Viviane has conducted 50 interviews with women leaders around the world to get a better sense of how women think about power, whether they feel isolated by power, and if women who hold positions of power act more like men in similar roles. The results seemed quite mixed – but Viviane’s research seemed to indicate that women believe that exerting power requires courage and that with power comes a sense of responsibility to help the women who are coming up behind them in their organization.
While these presentations were very interesting – the Q&A section of the breakout was really dynamic and created some intensive debate. The group discussed whether the a “threat of quotas” was really sufficient to create change. We also has an interesting discussion about whether quotas were needed for males in female-dominated industries to ensure gender-parity across society. Karin noted that in most professions (e.g. medicine) the skill-set which is required is quite clear. While the skill-set for boards is less clear – which means there is a fear that board nominations are a function of networks – and not skills. Therefore, quotas are needed to break networks and allow individuals with the right skills, but maybe not the contacts, compete for board seats. Our discussion continued into the challenge of ensuring women move up within the management funnel so that they can even be considered for executive level roles. Noreen noted, and Susan agreed, that in the 80s much of the hiring was 50/50 but that now the top management levels do not reflect this hiring. Likely, this is due to leaders at the top who are more likely to mentor – and pull up – individuals who look like them and frequently they are not women. Although the discussion could have continued for some time, we had to move on to our next session. I am looking forward to discussing this topic more over dinner tonight! #councilbusinessandsociety