Gender Influences Opinions of Board Diversity

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Women and men on corporate boards of directors appear to disagree on the importance of diversity, the need for quotas and the reasons why fewer women are represented on boards, according to research conducted by Heidrick & Struggles, a senior-level executive search and consulting firm; WomenCorporateDirectors (WCD), a global membership organization; and Boris Groysberg, a professor of business administration at the Harvard Business School. Various studies tend to paint a grim picture of board diversity. For example, as SHRM reported in May 2011, a study by the Alliance for Board Diversity (ABD) found that white men hold nearly 77 percent of board chair positions at Fortune 500 corporations, while the remaining seats are held by white women (13 percent), minority men (7 percent) and minority women (3 percent). And the 2011 Women on Boards Report, released by GovernanceMetrics International Inc. (GMI) in March 2011, revealed that, overall, women hold less than 10 percent of board positions in the 4,200 companies operating in 45 industrialized and emerging economies analyzed, a number that has changed little since the company first began measuring global board diversity in 2009.

Although nearly 60 percent of companies had at least one female director in 2011, according to GMI, just 8.5 percent had three or more women on their boards and just 2.2 percent had a female chair.
That’s why the Heidrick study, which reflects the views of 721 board members in 26 countries, provides interesting insights into some of the differences in perspectives held by male and female board directors. Among its findings: Forty-one percent of women support the use of quotas to ensure board diversity, compared to 13 percent of men. Fifty-three percent of women said they think quotas are effective for increasing board diversity, compared to 18 percent of men. Fifty-five percent of female directors said that three or more women on any board make it a more effective board. Just 16 percent of male directors agreed. And three-quarters (76 percent) of female respondents said they believe increased board diversity will help rebuild trust in boards. Less than half (42 percent) of men agreed.

"Women and men have differing points of view as to the reason why there are fewer women—both nominated and sitting on active corporate boards today," said Bonnie Gwin, vice chairman and managing partner of Heidrick & Struggles’ North American Board of Directors Practice, in a statement released Sept. 6, 2011. "About one-third of women directors globally believe that closed-off, traditional networks are the primary reason women aren't considered for director positions, whereas men believe there are fewer women currently in executive leadership roles, creating a smaller talent pipeline for entrance into the board room."

Nevertheless, in 2011, the Heidrick report found that more women and men expressed support for quotas, at 41 and 13 percent respectively, than they did in 2010, when just 25 percent of women and 1 percent of men favored the practice.

"This is a dramatic shift from last year's survey, where far fewer women and men supported quotas," said Henrietta Holsman Fore, co-chair of WCD and director of Theravance, Inc., in a statement.
Whether board quotas are effective for increasing board diversity and effectiveness worldwide remains to be seen.

"As we're learning from Norway and France, quotas, and even the threat of quotas, can be effective in increasing board diversity," Holsman Fore added. "To really work, they should be accompanied by preparatory measures, smart guidelines and implementation plans, along with databases of qualified women and corporate governance training."

Yet GMI’s report, which summarized efforts to impose quotas in various countries, noted that "Despite being the first to implement diversity quotas, Norway has experienced little upwards movement since its initial jump. From 2009 to 2011 the aggregate percentage of female directors has actually dropped slightly from 35.8 to 35.6 percent."