Women’s Impact in the boardroom – 2 positive outcomes from the last Decade

From 2010 to 2020:

Women have made a lot of progress this last decade when it comes to representation (and impact) in the boardroom. This is exciting and studies are showing this to be a very positive trend for corporations. While we still have a long way to go to being fully represented, it’s interesting to look at the last ten years and consider how far we have come.

Let’s explore some of the most recent, impactful changes.

In September of 2018 California passed a law (1) mandating that any public company headquartered in California must have at least one woman on its board of directors by the end of 2019, or, face a $100,000 one-time fine. The law goes on to declare that by the end of 2021, all California based public companies must have a minimum of two women on boards of five members and three women on boards of six or more – or face an even larger fine.

And there is more good news outside of California such as in the manufacturing state of Michigan. In 2019, for the first time in 110 years GM has more female directors on its board then men (2).

Remember all the hoopla when State Street Corporation installed the Fearless Girl statue on Wall Street in 2017? State Street has been challenging and urging companies with exclusively male boards to share this information with the public and bring on female representation or risk a no vote on any board slate that does not meet its gender diversity criteria (3). Ever since this challenge, hundreds of those companies have already added at least one woman to their board or have pledged to do so.

Further to this, there is The Paradigm for Parity® movement, a coalition of business leaders dedicated to addressing the corporate leadership gender gap. The coalition is made up of CEO’s, senior executives, founders, board members, and business academics who are committed to achieving a new norm in the corporate world: one in which women and men have equal power, status, and opportunity. Their goal is to achieve full gender parity by 2030, with a near-term goal of women holding at least 30% of senior roles.

This is all pretty impressive advancement for women in the boardroom!

Two Positive Outcomes

While there still exists some ‘old school’ myths (belief systems some are not ready to let go of) in many companies this is changing. A couple of these more obvious old belief systems are unpacked for you below, along with how having women in the boardroom has become an absolute game changer for those companies who have welcomed them in.

Old Belief System: “Women are too emotional for the boardroom”

The Reality: Women take in more information before making decisions; including considering the emotional impact of these decisions on others.

Simply put, men and women are wired differently. Women are multi-dimensional thinkers who incorporate their emotional intuitiveness into every decision they make. Men tend to be more singularly focused in their thoughts and reactionary to problems.

Women bring essential diverse perspectives to boards and studies have found that having a more diverse board ultimately increase corporate profits. Study after study, from McKinsey & Co to universities like Harvard show that women in leadership roles add vital and diverse perspectives that impact a company’s bottom line in a positive trend. They bring different voices, integrate contrasting insights and open conversations about diversity that were not taking place prior (4).

Many all male boards tend to be reactionary and often won’t deal with an issue until an actual problem arises. Boards with women are raising awareness of potential problems before they arise, which enables these companies to minimize the negative impact, save the company money and even employees their jobs. Further to this, an all-male board may deal with a problem as it arises and state ‘glad we dealt with that problem’ and call it a day while a female board member is much more likely to take it a step further and ask ‘how can we prevent this from happening again’ and want to put measures in place to prevent a similar situation from occurring.

Old Belief System: “It’s impossible to find a woman who would be qualified or fit in with our culture. They don’t know our industry”

The Reality: That right-fit female talent is probably already on your team and is ready to step up and serve.

This is pretty much a continuation of that first old belief. As of 2018, more than half of all management positions were held by women (6).  Interestingly enough, in S&P companies we can see women are less represented the higher up they go – and this is what is changing.

These women are ready to step up and serve on your board and are probably already on your payroll. By casting a wider net for board members to include diversity in experience, EI, demographics, sex, and skill set allows boards to look at their goals (and challenges) from more angles. As a result of this, they are less likely to run into hiccups or snags during role out of new procedures or launch of a new product and problems are less likely to be repeated.

Diverse boards provide companies with a much broader range of thought leadership. The diverse perspectives create a more inclusive environment throughout the company. Employees feel more comfortable speaking to management, communications improve, errors and injuries decrease…

Old Belief System: “Our company doesn’t interface with the general public so adding a woman wouldn’t make a difference”

The Reality: With the availability of information on the internet – specifically by our own corporate web pages loaded with information we provide – we are all serving our clients, communities and causes.

In today’s world we are ALL service providers to someone. Further to this, younger buyers buy from companies who support like-minded causes to theirs. If a corporation isn’t wearing their culture, community and causes on their branded website they risk losing audience and market share. Women understand community, culture and causes and bring a 360 view of how these elements fit into the corporate structure. They bring balance and compassion to a bottom line which is no longer just about numbers. This balance supports the need of all within a corporation as well as those of the consumer.

Some closing stats:

Globally, women held 21.6 percent of all directorships last year, up from 20.4 percent, according to data from MSCI. U.S.-based companies did even better, with 23.4 percent of directorships going to women, versus 21.7 percent last year (5).

There are several reasons cited for these changes; the rise of the #metoo movement, several high-profile corporate board firings and misbehavior resulting in lawsuits and large payouts to consumers.

We should feel good about our progress as women, but we’ve still a ways to go. Women will continue to find their seat at the table and future studies will continue to track the impact of having a more diverse boardroom. I can’t wait to see where we are in 2030.

To your continued success, Cheers!

ABOUT RACHELLE

Hi I’m Rachelle Stone. I was a 25+ year veteran of the Meeting & Convention Industry who, in 2014 left to transition to full time Consulting & Executive Coaching after my own personal implosion (yes, I burned out!). I now guide stressed out business owners and executives through the strategic steps needed to breakthrough plateaus and glass ceilings, accelerate their growth trajectory, increase profits, dominate in their market and reach their goals WITHOUT burning out.

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resources: (1) https://www.forbes.com/sites/allbusiness/2018/10/01/california-mandates-female-representation-public-company-boards/#2824960d1775 (2) https://www.autonews.com/executives/gm-board-will-become-majority-female (3) https://www.institutionalinvestor.com/article/b1b4fh28ys3mr9/State-Street-to-Turn-Up-the-Heat-on-All-Male-Boards (4) https://hbr.org/2019/03/when-and-why-diversity-improves-your-boards-performance (5) https://www.nbcnews.com/business/business-news/what-happens-when-there-are-more-women-men-board-room-n1013801 (6) https://www.catalyst.org/research/women-in-the-workforce-united-states/