More Women on Boards: An International Perspective

More women on boardsThis blog is provided by Lynne E. Devnew and Marlene Janzen Le Ber as a companion to their interview for Voice America conducted live at the International Leadership Association Conference. Their interview focuses on:  More Women on Boards, An International Perspective on Taking Action; it aired March 19, 2019.

Let’s begin with an assumption that in an ideal world gender equity, racial equity, religious equity, and cultural diversity would not be issues meriting attention.  The best candidates for positions in governments, leadership in workplaces, starring roles in film, etc. would always be chosen and these best candidates would be perfectly representative of the population.  As we all know, however, we don’t live in an ideal world.  We recently edited a book titled More Women on Boards: An International Perspective. In it, 42 authors, women and men from all over our globe, shared their research and experience related to an area where the world is far from the ideal – gender equity on Boards of Directors.  In 2017, women held only 15 percent of board seats globally.[i] There are many, many reasons for this lack of equity.  In our book, and in the work of other researchers, the challenges of reaching gender equity on boards have been explored and many suggestions for how to come closer to achieving the ideal have been offered.

One major conclusion we’ve reached, and which we believe is evident in all the work that’s been done, is that there are many ways to make some progress, or to move the needle, towards gender equity on boards of directors, but the influence of any one solution will be far from enough to reach the ideal and a “one size fits all” strategy will fail. In this article, we’ve summarized the challenges to achieving gender equity on boards and suggestions to address each of the challenges into four broad categories:  boards themselves, women themselves, culture, and laws. One more challenge relates to the argument whether this idea of gender equity on Boards of Directors is even worth pursuing.

Challenges – Boards Themselves

Boards and their current members provide challenges for increasing gender equity on boards.   First, in countries and companies without term limits for their Directors, the turnover is very limited and there may be very few board openings.  Demonstrating how important this challenge is, women were named to take 137 of the 358 vacant seats on Fortune 500 companies’ independent boards in 2017.  Thus, over 38 percent of the vacant seats went to women, a huge increase over the 28 percent in 2016.  But there were 4,747 seats on the boards of those companies.[ii]  So, even if all new board members were women, progress would remain very slow and totally excluding men as potential new board members would be unacceptable to most everyone.

Another barrier is the oft-stated requirement for board members to demonstrate an understanding of the “big picture”.  This competence is often viewed as best gained by serving as a company CEO.  However, as there are very few women who are hired as CEOs (e.g. 4.8% of CEOs of S&P 500 companies are women[iii]), few women have a resume indicating they have the CEO experience considered a prerequisite for board membership

Yet another challenge is that, in general, individuals are most comfortable working with others who share their values and their interests, people whom they both like and trust.  Thus boards have most often looked for new members among the people they know.  Sometimes they even seek people who look and act as they do.  They believe they are doing this in the interests of smooth board functioning.

Means for addressing these challenges include: board term limits; increasing the size of boards; recognizing that in today’s fast-changing, high technology, global economy CEOs aren’t the best source for the gaps in skillsets on boards; and adding women who are known and admired rather than merely “a woman” to meet a quota.  Executive recruiting firms are often used to help identify women not already known to board members and who would be a good board “fit”.

In addition to boards posing challenges to adding women members, boards can also limit women board members’ effective participation.  Some boards are run by chairs who listen only to a few most trusted members.  Adding women to a board if they are not going to have a voice on the board is meaningless, and board chairs are key to ensuring the voices of all board members are heard.  In addition, research has demonstrated that adding a “token” woman to a board means little except for an improved statistic.  Women’s voices seem to become an influence when there are at least three women on a single board.

Challenges – Women Themselves

Some evidence indicates that women themselves contribute to the equity issue because there are not enough women who aspire to board membership or who are prepared to serve on boards. As noted above, few women have served as CEOs and given that this is considered essential background experience, woman do not stand up to be included as independent directors.  “Golden skirts” in countries such as Norway highlight another problem.  Although women hold more than 40% of the board seats in Norway, many of the seats are held by a few women, the “golden skirts,” who are professional board members and participate on a large number of boards. The large percentage of undergraduate and professional degrees being earned by women, and the growing number of women in C-suite positions (even if not CEO) would suggest a larger number of qualified women for directorships.  Arguments are also made for the value of feminine relational leadership, which is more likely to be seen in women’s skill sets and backgrounds, as contributing knowledge, values, and decision-making approaches that would enrich boards; perhaps in ways that are more valuable than prior CEO experience. Today, many leading universities and professional women’s group offer programs to help women develop big picture and networking skills among others; efforts to help women who do not have CEO backgrounds prepare for board membership.

Some suggest that women don’t want to serve on boards; the cost-benefit analysis doesn’t come out favorably for women.  This appears to conflict with evidence that women are more prepared for board meetings than the men serving on the same boards.  However, women often have major responsibilities outside of work, and home and family roles can conflict with career ambitions.

Challenges – Cultures and Laws

This challenge is closely linked to cultural values, stronger in some countries and within some religious communities than in others, that women’s primary role is as a caregiver at home.  While our shrinking globe and global media have reduced this challenge to an extent, such beliefs still have a major influence.  Many would question the assumption of the ideal world we posed at the beginning of this statement. Even in Western countries where gender equity is espoused, most of the childcare, eldercare, and home care is done by women whether they work outside of the home or not. In some countries, gender equity is increasingly codified in the law; in other countries, the laws restrict women’s participation outside the home. Countries with strong cultural support for increasing the number of women on boards have used the legal system to require reporting of women’s representation on corporate boards or to enact quota systems.  In countries where the culture is consistent with quotas and where penalties for noncompliance are included in the laws, quotas have been quite effective.  Recently France joined Norway in the elite group of countries where the percentage of women on boards exceeds 40 percent.[iv]

Challenges – The Business Case

As a final discussion point, it is worth noting that once one gets beyond the arguments that it is unfair to discriminate against women and that it is foolish to dismiss the talent of half the world’s population, the arguments for adding more women to boards become controversial also.  Women board members have been found to add new perspectives that improve decision making, encourage innovation, serve as role models for women employees, change the atmosphere at board meetings, and encourage corporate responsibility.  Yet, when researching human behavior it is almost impossible to reasonably assume that the number of women on a boards is the only variable and that “all other factors are equal”.  Perhaps that is why the results of studies measuring the benefits of adding women to boards often seem inconsistent.  Company size, board make-up, chair behavior, industry, the style and behavior of the individual women involved, and all the other topics discussed earlier might also be “not equal” leading to conflicting evidence among studies.

We believe adding women to boards is valuable and that there are many, many things boards, women, and society can do to increase the number of women on boards.  We want to make sure we’re all remembering though, that complex issues seldom have simple solutions – and board equity is a complex issue.

To become a more innovative leader, please consider our online leader development program. For additional tools, we recommend taking leadership assessments, using the Innovative Leadership Fieldbook and Innovative Leaders Guide to Transforming Organizations, and adding coaching to our online innovative leadership program. We also offer several workshops to help you build these skills and system to create a regenerative, inclusive and thriving organization that will have a positive impact in the world.

About the Authors

Lynne E. Devnew is on the associate faculty for the doctoral program, is a distinguished research fellow, and chairs the Women and Leadership Research Group at the University of Phoenix in the United States. A former senior middle manager at IBM, she has a DBA in strategy from the Questrom School, Boston University, and is a graduate of Columbia University’s Master Degree Program for Executives in New York City and Simmons University in Boston, Massachusetts, all in the United States. Dr. Devnew’s research work and publications are focused on women’s leadership aspirations and leader identity development. She serves on the boards of several not-for-profit organizations.

Marlene Janzen Le Ber is Associate Professor and Chair, School of Leadership & Social Change at Canada’s only women’s university, Brescia University College and Adjunct Research Professor at the Ian O. Ihnatowycz Institute for Leadership at Ivey School of Business, Western University. Her teaching is all leadership-related. A multiple research-grant holder in the complex processes of leadership, her current research is in leader character, leader identity development in women, and impact of art-based and narrative research on policy and social change. Prior to her doctoral studies, Marlene was a health care executive within academic health sciences centers, known as a strategic leader who spearheaded numerous health system innovations. Marlene has a PhD in Strategy from Ivey Business School, MScN (Admin) and BScN from Western University.

[i] This statistic is from Deloitte’s “Women in the boardroom: A global perspective – 5th edition” published in 2017 and based on data gathered from over 60 countries.  The relevant statistic in the 4th edition, published in 2015, was 12 percent and gathered from more than 40 countries.  The report is available at https://www2.deloitte.com/global/en/pages/risk/articles/women-in-the-boardroom5th-edition.html.

[ii] The number of women filling vacant and new board seats for Fortune 500 companies is from Heidrick & Struggles 2018 “CEO & Board Practice”.  This report is available at https://www.heidrick.com/Knowledge-Center/Publication/Board_Monitor_2018.

[iii] This information is from Catalyst Research’s “Pyramid: Women in S&P 500 Companies” on March 25, 2019.  The pyramid can be found at https://www.catalyst.org/research/women-in-sp-500-companies/.

[iv] The leading role of Norway is discussed many times in our book, More Women on Boards: An International Perspective.  After it was completed, France passed the 40 percent mark, as reported in Catalysts’ “Quick Take: Women on Corporate Boards” dated December 21, 2018.  This report can be found at: https://www.catalyst.org/research/women-on-corporate-boards/.

 

At C-Level #9: Evolving Leadership for an Evolving World

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

Waves of change in technology are advancing at an exponential rate—20,000 times more than in the last century according to Google CTO and futurist Ray Kurzweil. So are waves of change in society, global and local economics, as well geopolitics. These incredible rates of ongoing change are driving…

  • the evolution of your customers’ needs and your competitors’ offerings faster than ever,
  • the obsolescence of technologies your offerings depend on today,
  • your most capable employees’ desires to leverage new technologies to innovate, grow, and evolve themselves, and
  • a vastly accelerated pace of change in your business.

Are you evolving the way you and your team lead to continue to ride these waves of change? If not, you may be swept beneath them.

Over the course of human history, there have been six major shifts in societal/cultural norms (eras) with corresponding leadership development and advancement. The first four were driven over tens of thousands of years by increasing populations, the continued need to feed and protect growing population centers, and a primal power base:

  • ARCHAIC: nomadic clans hunting and foraging for food
  • TRIBAL: the formation of tribes and villages and the developments of horticulture and shepherding
  • WARRIOR: the building of city-state empires using serf or slave labor to establish early agricultural practices
  • TRADITIONAL: the growth of city-state empires to wide-spread kingdoms and monarchies battling over turf and power

Next came the MODERN Industrial Scientific era where leadership spent more time and energy on perfecting tasks and processes (think assembly lines) to support mass production and distribution of traditional products, but also products based on new technologies, like automobiles, mostly in developing nation-states with access to the required resources. Commercial success translated into new power bases. The Modern era developed over a period of approximately two-hundred years and many people and organizations are still functioning at this level.

Then came the POST-MODERN era where leadership became much more introspective, thoughtful, and systems oriented, where the information age and the internet have spanned virtual transnational networks. This era has really only developed over the last 20-30 years with the advent of the internet.

Note that the first four eras developed over tens of thousands of years and that some parts of the third-world still may be functioning at some combination of the Tribal, Warrior and Traditional eras. They co-exist in close proximity to parts of the world where the Modern and Post-Modern eras developed over just the last couple of hundred years. Hence, it is reasonable to assume that the incredible rate of increasing technological advancement over time so far will only continue to increase exponentially going forward, and Kurzweil’s predictions are not so far-fetched as they may seem! It has become more and more difficult for leaders and organizations to keep up.

So now, we are beginning to experience the seventh societal/cultural/leadership shift into what we call the INTEGRAL era. In this era, technological change, economic change and geopolitical change outpace the abilities of most Modern and Post-Modern leaders who think in terms of tasks, processes, and systems. Integral era leadership must consider the constant evolution of entire ecosystems in which we operate, and evolve ahead of the curve—or at least with the curve—to just survive, let alone thrive.

When today’s foremost leadership experts were doing research for the book Leadership 2050, they looked at five recent global studies on organizational leadership needs for the future. All five studies generally concluded that there are not enough leaders in our current leadership pipeline that have the higher-ordered skills and capacities to meet the complexity of today’s challenges, not to mention those needed for 2050.

What are those higher-ordered skills?

  1. Being professionally humble – Astute leaders care more about doing the right thing than being right. Their focus is on the mission and they consistently give credit to their team and others when they succeed.
  2. Having an unwavering commitment to right action – A thoughtful leader consistently makes decisions based on what action will most effectively advance the organization’s mission, even if doing it is not the easiest path.
  3. Being a 360-degree thinker – A prudent leader consistently considers the industry, environment and trends driving future success, in addition to the organizations’ strategies, capabilities, and, most obvious, environmental factors.
  4. Being intellectually versatile – Creative leaders draw from a broad set of interests and involvement in activities outside their organization. Those activities also give them opportunities to recharge.
  5. Being highly authentic and reflective – Self-aware leaders who possess a strong sense of mission and are transparently guided by a set of consistently adhered-to principles build trust that promotes an environment of high performance.
  6. Inspire followership – Leaders strong in the previous competencies, with a sense of humor and mild self-deprecation, who are warm and empathetic, inspire a followership that appreciates the tough conversations required to maintain ever-higher performance and achievement, and are continually inspired to do more.
  7. Being innately collaborative – Exceptional leaders value input from experts and those impacted by key decisions, and promote the offering of differing points of view, knowing that multiple perspectives result in better outcomes, more support, and stronger execution.

How can you develop these higher-ordered skills?

These competencies generally take years to develop and are gained through both unplanned and planned life and career experiences.

Nick Petrie from the Center of Creative Leadership says what he calls “vertical ego-maturity development” is helping leaders move from one level of ego-maturity to the next (becoming less self-centered) to match leadership style with the demands of society. A similar leadership developmental process occurred to move between each of the societal levels referenced above, with the specifics varying according to life conditions. This transformation process occurs through:

  • Heat Experiences where a leader faces a complex situation that disrupts and disorients a habitual way of thinking. Through this experience there is a recognition that the current way of making sense of the world is inadequate. The leader opens up to different perspectives and starts searching for new and better ways to make sense of the situation.
  • Colliding Perspectives where a leader is exposed to people with different world views, opinions, backgrounds, and training that challenges existing mental models and increases the number of perspectives through which the world is viewed.
  • Elevated Sense-making where a leader uses a coach, or a self-developed process, to help integrate and make sense of these perspectives and experiences from more elevated stages of development. A larger more advanced worldview emerges and, with time, stablizie.

At Metcalf & Associates, we work with our clients to create perpetual innovation, evolution, and growth in their leadership and business by providing

  • Individual or group Innovative Leadership training
  • Team/organization innovative culture development
  • Organizational transformation engagement, and
  • Ongoing consulting, coaching and/or follow-up sessions to ensure:
  • Growth in perspectives when unplanned heat experiences or colliding perspectives “barge in,”
  • Development of elevated sense-making with new perspectives, and
  • Sustainability of developmental goal achievement and/or transformation.

For additional tools, we recommend taking leadership assessments, using the Innovative Leadership Fieldbook and Innovative Leaders Guide to Transforming Organizations, and adding coaching to our online innovative leadership program. We also offer several workshops to help you build these skills. You can download the first three chapters of the Innovative Leadership Workbook for Emerging Leaders and Managers for free.

Thanks for following us! Please look for more upcoming blogs and blog series at “C” level from Mike.

Black Holes and Taboos

This blog is a companion to the May 9, 2017, interview with Gary W. Patterson, CEO of the Fiscal Doctor on VoiceAmerica “Innovative Leaders Driving Thriving Organizations” on Board Black Holes and Taboos. This blog is based on an article by Gary W. Patterson published in Financier World Wide, Boardroom Intelligence. Gary and Maureen are collaborating to refresh the data and identify the most recent issues.

 

We invite you to take the new survey (5 minute investment) and help us update the results for 2017.

Carla was on the board of a high-profile company. Like many others, their industry was facing dramatic change because of the pressure retailers were experiencing. Her primary distributor was facing economic challenges and she wanted to diversify to manage the potential risk. At the same time, she wanted the company to pay attention to the speed with which competitors were developing new products and evaluate how her organization should pace new products to stay current and manage profitability.

Boards continue to govern in an increasingly complex business environment. Participants at the National Association of Corporate Directors (NACD) Annual Board Leadership Conference SUCCESS identified a list of twenty uncomfortable topics that board directors and CEOs sometimes gloss over. We believe all directors should be considering how they are performing against these criteria. We created an updated survey for you to evaluate your risk and encourage you to evaluate how you score on this 10-question board health check-up and identify where you might be experiencing your highest risk.

According to Gary Patterson, “Pressed by hard financial realities, leaders say they made it through the recession by hunkering down through the mean times and getting lean. They were forced to cut fat, then muscle, and finally bone.” They are so busy delivering the current products and services and focusing on meeting current objectives that they often don’t have the capacity to do as thorough an evaluation to identify future risks, as they would prefer. We live in a world where there is not enough money, people and time to fix all problems and pursue all opportunities. If leaders don’t think through the taboo topics, they can make suboptimal choices.

Gary grouped the top issues into five key categories:

  • True customer and service profitability: Organizations need to understand their business and how they compare to their competitors against current performance and against projected trends so they can proactively manage the opportunities and threats we will face.
  • Ability to handle change: Organizations are not putting enough focus on strategically identifying possible changes and conducting experiments that will give them data they can use to navigate new or different territory. This includes leveraging their best people and proactively performing succession planning and developing future and emerging leaders across the enterprise.
  • Overly optimistic financials and procedures: Organizations need to continually invest in innovation, including addressing structural barriers such as incentive plans and risk profiles to ensure they are positioned to stay relevant while not being overly leveraged because they tried to innovate too quickly or placed too many or too high-risk bets for their financial situation.
  • Opportunity cost: Organizations often play it safe a bit too long and hesitate to terminate products and services that are no longer supporting long-term profitability and may be draining resources. This happens for many reasons ranging from lack of sufficient data to thinking too conservatively about innovation and risk.
  • Situational blindness: Unwillingness to see and consistently address the “brutal facts” when they are presented including the regulatory concerns about executive compensation.

As executives and board members, it is critical to take the time to periodically evaluate these risks and mitigate them. Perhaps now is the time to get your organizational house in a little better order: to know, prioritise, and fix those high-impact issues that will not go away. With that process, you will better understand your risk profile and be more comfortable that the right big bets are being made on your business. Then, you can worry less about your million-dollar blind spot finding you before you find it.

About the author Maureen Metcalf, CEO and Founder of Metcalf & Associates, is a renowned executive advisor, author, speaker, and coach whose 30 years of business experience provides high-impact, practical solutions that support her clients’ leadership development and organizational transformations. Maureen is recognized as an innovative, principled thought leader who combines intellectual rigor and discipline with an ability to translate theory into practice. Her operational skills are coupled with a strategic ability to analyze, develop, and implement successful strategies for profitability, growth, and sustainability.