GROOMING WOMEN EXECUTIVES FOR BOARD ROOM SUCCESS
By Melisa Denis
Three years ago, I started investigating the qualifications to serve on a corporate board. As a senior partner in one of the big four accounting firms, I had plenty of experience working around C-level executives and corporate board rooms. As a female in the business world, however, I often find myself alone or one of a few women in meetings. I didn’t understand how women could break into the “board room club.”
Here are some things I do understand – unless an idea or organization is commercially relevant, it is rarely sustainable. Pepperdine University found that the FORTUNE 500 firms with the best records of putting women at the top were 18 to 69 percent more profitable than the median companies in their industries. Consulting firm McKinsey looked at the top-listed European companies and found that greater gender diversity in management led to higher-than-average stock performance. Diversity organization Catalyst found that companies with three or more women on their boards outperformed the competition on all measures by at least 40 percent.
Authors Claire Shipman and Katty Kay repeatedly have documented the value proposition of women in business in their book, Womenomics. For instance, they reported that women own nearly half of privately owned businesses – usually by boldly leaving the corporate world to pursue their own passion. It seems that the recession may be highlighting female management strengths more clearly. At the World Economic Forum in Davos, many suggested that if Lehman Brothers had included some women, or if the top investment banks had more senior women in the ranks (including the board room) perhaps the economic crisis might have been averted. Why? Women tend to take a more long-term approach to risk and decision making, especially compared to their male counterparts.
My belief system places value on a diversified team that considers different points of view in decision making. The results are usually stronger than those made by a like-minded team (whether it is gender, skill-set, or other factors). As I started my due diligence about the idea of becoming a member of a corporate board, I realized that many board members were CEO’s. If being a CEO was the criteria for board service, the odds are against becoming a board member because women hold less than 3 percent of CEO titles in the U.S. Three powerful female CEOs provided insight to the fundamental question, “Do you need to be a current or former CEO to sit on your board?” Fortunately, their unanimous response was that a CEO title was not the most relevant criteria for board service.
If other qualifications are the basis for board service, why are there so few women board members? I believe it is a pipeline issue. If women are going to change the diversity landscape on public and private corporate boards, they must get qualified and networked. To get more qualified women serving on corporate boards, more qualified women need to be available for selection. Not that long ago, companies appointed board members from friends of friends, or friends of the chairman. Candidates were reflective of the composition of that board; typically 65-year-old (retired) while males. Now, with Sarbanes-Oxley requirements, changes are being made in the selection methodology.
With this background, the Board Connection (TBC) was formed in 2009. Surprisingly with the number of companies headquartered in Texas, no organization existed to help women prepare and network for board positions. A few brave women recruited from my professional network helped launch this non-profit organization to change the rules and put women on corporate boards. TBC’s mission is to identify women with the capabilities to be ready for corporate board service within three to five years. TBC seeks out women professionals who are C-level, finance, marketing, HR, legal and other strategic level professionals who have the experience and business credentials (or will within a short timeframe) to add value to a board of directors.
Men must be open to this change for women in the executive suite and serving on boards. If the board truly represents the shareholders and diversity increases shareholder value, it just stands to reason that “women of the board” room makes good business sense. It is one thing to say that men want diversity on their boards. Will male business leaders help facilitate the change? Time will tell.
Melisa Denis is a senior partner at KPMG, Dallas, and is President of The Board Connection. Ms. Denis also recognizes the contributions of Tamara Bebb, Lisa Bormaster, Paula Calise, Eliane Hall, Carla Howard, Kelly McDonald, Alan Stein and Shelley Venick who also helped launch TBC. www.theboardconnection.org
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