In corporate America, the glass ceiling is most evident for Boards of Directors than any other role. It is the one function where the most complex skills and billion dollar responsibilities are less relevant than the single specification of "being a CEO". When a C-suite role is open, a very detailed job description is developed, list of possible candidates compiled, and a very formal interview and evaluation protocol is followed. Candidates for board of directors’ positions are sourced mainly through networking, (ironically in a similar fashion as Nannies), where primary qualifiers are personal references and having done it before – results are secondary. This approach results in a narrow “known” pool of candidates, which can exclude women. The following outlines the urgency for change.
#1 - Financial Performance - more women on executive teams and boards equates to better financial performance. The research on this topic is abundant and from a wide variety of sources. It is readily accepted that the tipping point, in terms of group dynamics, is three women on a typical team. Further, we know that more women board member correlates to more women corporate officers. Common sense leads companies to actively seek out qualified women for their executive ranks.
#2 - Talent – nearly half the work force is not in contention for top jobs.
Women represent 50% of the work force; yet only 3% make it to top, with less than 20 CEOs of the S&P 500 being women. Even though it may not feel that way in New York City, two events are triggering shifts in population demographics that are simultaneously resulting in a worldwide talent shortage.
First, the post WWII population bulge, colloquially known as the "baby boomers" are beginning to retire. The 2010 United States Census reported that the population 65 and over grew at a faster rate than the total population between 2000 and 2010. Within the next decade, businesses will see an exponentially increasing loss of their most knowledgeable workers. Secondly, women are graduating Universities and obtaining advanced degrees at a greater rate than men. In 2010, for the first time women represented more than half of the workforce. It is in companies’ best interest to tap this underutilized intellectual resource.
#3 – Global Competition – there are legal mandates, quotas, for women on boards or senior management positions in public companies in Belgium, France, Italy, Malaysia, Norway and Spain.
Quotas for women on public boards are currently on the legislative agenda in the European Union and India. In more than 100 countries, women on boards, in the private sector, or in legislatures, in the public sector, has become a matter of public policy debate. The United States has been, in many cases, several decades ahead of other countries in terms of gender diversity in the workplace because of the enactment of Title VII of the Civil Rights Act of 1964.
As opportunities for women in the U.S. workforce have plateaued for a generation, other countries have plowed ahead. If serious consideration is not given to gender diversity in the U.S. boardroom in the next decade, the U.S. will experience a competitive disadvantage.
Strategic Diversity Solutions: Top 3 Reasons to Care about Women on Boards of Directors
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