How to Make More Money by Getting Women on Board
Nearly 80 years ago, Coca-Cola elected the first woman, Lettie Pate Evans, to serve on a major public board in the United States, becoming the real thing on progressive thinking in the 1930s. Refreshing as that was, it would be 46 years before Coca-Cola elected another woman to their board and only four more since. As disappointing as that lack of progress seems, there are only a handful of companies doing better. According to recent GMI findings, only 8 percent of companies have three or more women on their board and 36 percent of U.S. companies still have no women on their board.
With the multitude of studies showing the positive financial impact resulting from board diversity, the question can no longer be “Should we or shouldn’t we?” but “Why haven’t we?”
How can you and I fast-forward this conversation to achieve results? Here are three groups of people that can help enact change.
Nominating Committee Members and Board Members:
The National Association of Corporate Directors (NACD) recently published their appropriately titled report “Moving Interest To Action.” The report states that 77 percent of director candidates are identified through personal networking. Naturally, this results in candidates coming from similar social circles, geographic locations or professional relations—thus perpetuating the status quo and ignoring an untapped goldmine of talent with diverse backgrounds that could stimulate board thought patterns.
Enter the "match.com" for the corporate directors. Diversity leaders CalPERS and CalSTRS (California public pension funds) not only advocated diversity for their investment portfolio, but also went one step further and commissioned the creation of a new database called the Diverse Director DataSource—or "3D". This database is designed to help companies and recruiting firms identify and recruit candidates that are not currently in their circles. There is no charge for an individual to enter their qualifications into 3D to be considered for board selection.
NACD has several recommended actions in their report—here are three that a board member can begin doing today:
- Nominating Committee members should insist that all searches includes diverse candidates—do not accept that there are no known qualified women.
- Board Members should network with the high-potential female leaders in the companies they serve. Create your own personal network of diverse candidates so that when asked for a recommendation you have a pool of leaders to pull from.
- Get involved in your local women’s leadership organizations to diversify your network.
Chief Executive Officer:
CEOs can ensure that high potential employees participate in board activities to allow both exposure to the boardroom and the board members—remember, 77 percent of director candidates come from personal networks. While your employees may not be candidates for your board, they could be ideal candidates for other companies that your directors currently serve.
- Create opportunities for diverse leaders to meet with your board to increase exposure to the board process and the board members.
- Encourage your leaders to sit on a for-profit board (not necessarily publicly traded)—startups and mid-sized companies are great targets for first-time board members. This experience will not only make them more appealing for future board roles but will broaden their competencies which is a true win/win.
- If you are supporting a women’s organization within your company, don’t just show up for the opening remarks, stay the entire day—show your commitment to diversity and other leaders will follow.
You have the easiest part in all of this—raise your hand! One thing we know about women is we wait to raise our hand until we are 80-percent confident we can do something. Typically, we wait for someone to tap us on the shoulder.
- Make sure you understand the value and contributions you will bring to a company—identify your brand before you seek a board position.
- If you are female executive that has experience in any of the following you should submit your information to 3D today:
- Current or former C-level executive
- SEC designated financial expert
- M&A transactions
- IT or social media
- Asia-Pacific understanding
- Succession planning/talent management leadership experience
- Ask your CEO to network with your current board members
- Reach out directly to your board members (or any board member you know) for coffee and mentorship.
- Contact a recruiter that specializes in board placement
- Find a startup that needs your expertise to sit as a board advisor
If you have other suggested actions please share your comments or continue the conversation with your own post.
Coca-Cola blazed the trail with a progressive board in 1935 and unforgettable slogans throughout the years. Can we fast forward this conversation and move to celebrating success—anyone else up for the Lettie Awards?