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updated 2:54 PM CDT, Jul 28, 2018

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Six-continent survey of board members says women help boards make better decisions

A study involving more than 100 male and female directors on boards around the globe, aimed at determining the relationship between board effectiveness and the contribution of women directors, has concluded that boards make better decisions when a healthy number of women sit at the table.

Cate Goethals, a University of Washington academic leader who conceived and co-authored the Better Boards Project, says there's a growing sense that the financial crisis of 2008 was in part the result of a sort of "group think" of public-company boards, which are inevitably composed mostly of men.

Goethals, who has created three programs at University of Washington's Foster School of Business to connect women leaders and global business, says that this emerging line of thinking has led to a growing focus on the composition of public-company boards, including legislative involvement in board makeup in some countries.

Goethals, who co-authored the Better Boards Project with Susan Bloch, a management consultant and author of books on management, noted as an example that Europe has seen requirements for quotas of female board members, including France where 40 percent of the directors of boards of certain types of public companies must be female.

"Even in countries like the United Kingdom, the U.S. and Canada where there are no legal requirements, more women are being appointed to boards than ever before," said Goethals.

The study sought to answer a series of questions, including do women contribute differently in the board room, how do they contribute to board effectiveness and why are the numbers of women on boards so low.  

Supporters of greater representation for women on boards of public companies do see improvement and cite several reasons for that.  

For instance, a number of interviewees noted that the presence of female directors has come to be increasingly viewed as a marker of a progressive, forward-looking board. What company wouldn't want that image?

And the report noted that generational shifts and the call for different types of experience are also changing the landscape. An example was the need for a more youthful perspective and savvy with social media and new technology becoming a particularly acute need.

What clearly was a knock on the prevalence of all-male boards was the basic agreement among interviewees that "women provide a much-needed safeguard against group think and rubber-stamping of policy, which continue to hinder board effectiveness."

But noting that women are still joining boards at a slow pace, the report suggested the way boards look at themselves is a key factor in that, including the practice of identifying potential new board members on the basis of "who do we know." Men generally know other male prospects.

Neil McReynolds, who has been in board leadership roles and consulted with CEOs and boards and also been involved in helping boards recruit new board members, says he thinks "a combination of factors" will be necessary to make a difference to bring more diversity to boards.

McReynolds says that he frankly finds it surprising the increase in the number of women on corporate boards has come as slowly as it has, "especially for those companies in consumer products and services where women make a large percentage of purchasing decisions.

"It's going to take investor pressure, outspoken CEO's, active support by executives and board members, and improving the pipeline by making it easy to identify qualified women directors," McReynolds said.

When asked about the ways their boards are seeking to improve, most directors said their boards were doing very little and cited "ineffectual board assessment practices and, to our surprise, an almost complete absence of reviews of the performance of individual directors," the report said.

In an area like Seattle where women business leaders and entrepreneurs have been a prominent part of the business community leadership and non-profit board landscape for years, men, and even some emerging women leaders, might find it difficult to accept that women have faced an uphill battle in getting board slots at public companies.

After all, we have Phyllis Campbell, regional head of JPMorgan Chase and former Washington president of U.S. Bank, currently a member of the board of Alaska Airlines who has served on three other major boards. And Judith Runstad and Deanna Oppenheimer come quickly to mind.  

Runstad is former co-managing partner of Seattle law firm Foster Pepper, a member of several public company boards and prominent in business locally since before Rotary permitted women members. And Oppenheimer, who left Seattle to become head of Barclay's operations in England and now back in Seattle. is a member of several boards nationally.

But Cate says it would be an indication of complacency for those in this area, particularly men, to assume we are somehow ahead of the game in terms of board opportunities for women.

"Washington state is pretty good, with about 20 percent of public company board positions being filled by women," she said. "but the technology industry is almost the reverse, with most boards composed entirely of men. Most are boys clubs, because venture capital firms like dealing with men."

And business prominence apparently doesn't necessarily convert to the kind of business networking that leads to being sought out for public-company board roles when mostly male boards sit around and ponder who should join them.

One who is seeking to change the networking challenge is Janis Machala, an entrepreneur, involved early in the formation of the Seattle's women's angel group called the Seraphs, and in recent years in academic efforts relating to entrepreneurism.

She is setting up a women's CEO roundtable in the Seattle area to boost networking opportunities for female top executives. Presumably, one of the goal is to help each other become more generally visible in the business community.

As Machala puts it, "they need to learn to be the external face for the company."

Susan Preston, a Seattle attorney who actually launched the Seraphs as the first female angel group in the country back in 1999 and has been a entrepreneur in residence for the entrepreneur focused Kauffman Foundation, is in the process of creating an angel fund, which would provide women investors networking opportunity with angel peers.

Machala and others have been circulating the Better Boards report, hoping it will start what she calls "more conscious decisions about board composition" adding, "what's needed is advocacy or women and other diverse populations and not just referrals or board member talks about this."

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