By Roberta Attanasio, Forever Leaders Editor
The number of women who serve on corporate boards of directors is increasing a little at a time in the U.S., but we need more. According to 2020 Women on Boards—a nonprofit organization that conducts research studies about the gender composition of the boards of directors of U.S. companies—women hold just a small number of board seats. In 2015, the 2020 Women on Boards Gender Diversity Index of Fortune 1000 companies showed that women hold 18.8% of board seats, an increase from 17.7% in 2014. The percentage of board seats held by women in 2011, the first year of reporting, was 14.6%. However, 18.8% is a small percentage “when you consider that: women comprise about half of the total U.S. workforce; hold half of all management positions; are responsible for almost 80% of all consumer spending; and account for 10 million majority-owned, privately-held firms in the U.S., employing over 13 million people and generating over $1.9 trillion in sales.”
Image credit: Dennis Jarvis, CC BY-SA 2.0
Why should we care about board composition? A board of directors is made up of a group of senior advisors who oversee the activities of a company and represent its shareholders. “Boards of directors make decisions that can impact you, your community, and the country. That’s why it’s important that membership on corporate boards be representative of a company’s constituents. Boards of directors choose CEOs. They make decisions about executive compensation, whether to buy, sell, or merge with other companies, where corporate offices close and relocate, and how much priority a company gives to issues other than profits, such as social responsibility.”
A frequently cited study details the advantages that women bring to boards. Women provide a collaborative leadership style that benefits boardroom dynamics by increasing the amount of listening, social support, and win-win problem-solving. The study also found that although women are often collaborative leaders, they do not shy away from controversial issues. They are more likely than men to ask tough questions and demand direct and detailed answers. Women also bring new issues and perspectives to the table, and women of color add perspectives that broaden boardroom discussions even further.
Catalyst—a nonprofit organization with a mission to accelerate progress for women through workplace inclusion—reviewed several studies to identify the benefits that women’s representation brings to corporate boards and found that, when more women seat on the board of directors, there are higher return on sales; better stock growth; lower risk of insolvency; and lower likelihood of financial restatement. In addition, the presence of more women on the board appears to facilitate the advancement of women to the C-suite.
A board with women is a better board—increasing women’s representation on corporate boards is good for business and good for the economy.
Copyright © 2016-2018 Forever Leaders.
I feel if we put more women on corporate boards, we can create more diversity leading to an increase in ideas and innovations. I believe sometimes men don’t throughly think about the pros and cons of their actions. Having more women on boards will allow more conscious decision making. For example, I was apart of SGA in high school. I was the only female and I felt like many of the decisions my male counterparts made were too harsh. It was like a all or nothing thing. There was no meeting in the middle. The school wanted to have out prom in the cafeteria due to lack of funds. Most of them said we shouldn’t have prom at all if its going to be in the cafeteria. Instead, I put that we have fundraisers in place to fund the prom. Also, I suggested that we should call around to get companies to sponsor the school. Guess who had their prom at the Freight Depot? We did.
I wholeheartedly agree that there needs to be more variety on executive boards; not just women, but minorities as well. As it stands now, and how it’s been for decades, it’s primarily white men on these boards. I have several female friends and family that are high up in their careers, but can’t seem to get past the director level, let alone the C-suite or executive board. I feel like the changes we need for equality will not happen until we are represented properly by the people who are making these bid decisions on policy. It’s almost like a defendant who is black being judges by a jury of all white people. There is no way that an non-diverse board will ever implement changes that would benefit the minorities of the company. We have to have representation in the highest levels of the company before we see any changes trickle down.
I do not think it could ever be stressed enough how much representation matters. This is why Obama winning the presidency was such a big deal, or the importance of Jake Gyllenhaal not playing the Prince of Persia or Elizabeth Taylor as Cleopatra. The whitewashing in Hollywood is a major problem because it suppresses people of color from having ties and a connection to other people like them because it is not what is being portrayed on the screen. This same problem is prevalent in gender, too. Although we are no longer in the time when males would play the roles of females because women were not allowed to do theater, we are still in a time when women are constantly devalued and not represented to the full potential, especially considering that according to geo hive (http://www.geohive.com/earth/pop_gender.aspx) women make up slightly more of the world population when compared to men. Women’s voices are continuously not heard because of this suppression, with women less likely to be interviewed in major news stories, less likely to report on topics (NewYork Times has the biggest gap with 3 men to every 1 female-men even report on topics such as fashion and lifestyle more than women), and less likely to be quoted. On top of that, women are unequal in terms of deciding what stories are told. 9% of directors in the top 250 domestic grossing films are women, and only 6.8% of radio stations are owned by women. All things considered, women’s voices should be heard at a much higher level than they currently are, because by not allowing them to be it is essentially isolating half of the people in the world. Representation matters, especially on boards that are so crucial in influencing major decisions within companies that have a trickle effect of affecting everyone within the world economy.
More women do need to be on boards, especially corporate. Women contribute greatly to the economy, small business, large businesses, and make up about half of the U.S total workforce and management positions. But women are barely making decisions on the corporate level. Why aren’t women making it onto these boards like men? Women often underestimate their self-worth when it comes to decisions outside of their household. Women who are mothers will gladly take charge in terms of their home, how to do their laundry, how to take care of their kids, or even how to take care of their husbands. But something is holding back women from thinking they can take charge on matters outside the home. It could be that women feel like it’s not their place to have a seat at the table and if they do take charge they come off as overly aggressive. Women tend to not only underestimate themselves but they refrain from helping other women claim onto boards way more than men. Men often help each other get on boards and into executive positions yet, many women have their superiority complex and selfish mentality that they feel they have to step on other women and be the only women as long as they are respected by the men they work with.
With progress comes education so luckily there are programs like Catalyst that help women become more included. And I really hope that even more programs like this come about. Women need mentors and a network they would generally sponsor them as well since women are more likely to talk themselves out of applying and seeking higher positions that they may not be fully qualified for. But with many support I believe that women will have more seats at corporate boards throughout the world.
I am glad to see organizations like Catalyst doing research like this. I think the under-representation of women on boards needs to be address especially since women represent about 80% of consumer spending. I agree that women often underestimate themselves based on social biases thinking that they are not qualified for something considered a “male job.” Research has shown that having more women on boards has a positive effect in all regards. So the question remains why are things changing so slowly after finding these results? Is it that men do not want to give up their power? The women already in these positions want to keep their spots so they don’t advocate for the advancement of other women? Maybe a mixture of both? I would hate for this to turn out like women in computing, the issue was given attention and the rates of women entering the field grew and then began to fall again. I think it is good that we see results but I think we need to stay on the issue and push for 50/50 equality so that the percentage of women on boards does not fall back to where it was before especially because the change we see now is so small.