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On Wednesday, I attended the 2011 Breakfast of Champions for an overflow audience at the New York Stock Exchange organized by the Women’s Forum of New York. It was an inspiring panel of “Champions” – CEO’s with at least 20% women on their Boards of Directors sharing insights about the difference women and diversity make to their companies.
Here are some highlights of what I heard.
Janice Ellig, President of the Women’s Forum of New York and Co-CEO of the Chaddick Ellig executive search firm, framed the discussion with a compelling presentation. She said there were only three numbers to remember: 60, 84, and 60. First, 60 of the Fortune 500 companies have no women at all on their Boards of Directors. 84 is the percentage of Board seats that are held by men and 60 is the number of years it will take to reach parity if women continue to advance at the present sluggish rate (in 1996, women represented 6% of Directors, today, they’re at 16.7%).
Paula Stern, from Avon’s Board of Directors, said that “diversity inoculates against Group Think.” Research bears out that when Boards are made up primarily of the same kinds of people with the same perspectives, ‘group think’ sets in and decision-making suffers, as a result.
It was refreshing to hear three male CEOs speak about the importance of women on Boards. Several panelists said that women on Boards lead to deeper analysis and better decisions. Bill McCracken, CEO of CA Technologies, said that women listen more, seek out others’ opinions, get to decisions by raising questions without assuming that they are right, and that women often show greater empathy. These kinds of observations have been made by Joe Keefe of Pax World investment firm who promotes women on Boards for the same reason. We also found in our Women in Fund Management research that women tend to ask more probing questions and take into consideration more information, including contradictory factors, when making decisions.
The panel was moderated seamlessly by Pat Mitchell, CEO of the Paley Center for Media who reminded us that we were in an audience of the already converted. Even though we had three male CEOs on the panel, much of the audience was made up of women executives. How to engage more men as partners and champions is something we are all grappling with in this space.
The matter of quotas surfaced. Shelly Lazarus, Chairman of Ogilvy & Mather Worldwide, said that in Norway, where there are quotas for women on Boards of publicly traded companies, there was huge resistance initially to the idea. One woman Board member from Norway whom she spoke to reported being deadset against quotas for women, but came around after seeing how quickly women were able to learn and have a positive impact on the Boards. As an anthropologist, I’m particularly aware that change is possible and that people can adapt to new ways of doing things.
Another issue raised at the panel was the importance of expanding the pool of Board candidates with an increased ratio of women and convincing search firms that companies will be demanding this. There was talk of the “same ten candidates” being shopped around. Many of us have been engaged for years in efforts to expand the candidate pool and we applaud the Women’s Forum of New York for planning to develop a data base of Board-ready women – a project whose time has been long overdue.
To turn the tide, Murray Martin, CEO of Pitney Bowes, suggested making good, hard skills assessments and recruiting candidates based on what was truly required. He said that CEOs were not necessarily the best candidates for the job and that recruiters should take other senior executives into consideration. Also, companies must do more to prepare women for Board service. “We need to ask ourselves what we’re doing to export talent,” he said.
Lulu Wang from the MetLife Board concurred. “We need to evaluate the skill sets companies need on their boards, and then match them with talented women who have strengths in areas such as international experience, technology savvy, capital markets, etc. And we must look below the CEO level to find candidates,” she said.
Another issue raised was tenure. In many instances, Directors serve indefinitely. Bill McCracken recommended that term limits be set so that fresh talents and perspectives can be provided to Boards.
The candidate database planned by the Women’s Forum of New York is a great first step to enlarging the pool. These efforts will be undertaken in collaboration with Kathryn Wylde and the Partnership for New York City as well as Marie Wilson, President Emerita and founder of The White House Project.
Everyone agreed that we need to advocate, advocate, advocate with evidence-based research. The National Council for Research concurs and will continue to press for advancing a critical mass of women onto corporate boards with 30% or more representation by 2020.