Progress in women achieving corporate board seats in the U.S. actually slowed overall in 2020, yet pressure to achieve boardroom diversity continues to build, as evidenced by Nasdaq’s recent requirement that listed companies have two diverse directors or explain why they do not. Veteran directors and industry experts share ways to improve board diversity results.
1. Accept no excuses. The argument of a “pipeline problem” for women qualified to be directors is specious. Strong candidates exists, boards just need to double down on finding them. As Diane Hessan, a board member at Brightcove, says, “Pardon me, but when Mitt Romney said [in a 2012 presidential debate] that there are ‘binders full of women’ who would be qualified candidates for his cabinet, he was absolutely right: The city of Boston alone is a testament to that.”
2. Wider lens. Look at qualifications more broadly. Most directors are still CEOs or CFOs of their companies, the two areas of the C-Suite where women have least penetrated to date. So, consider CMOs, CHROs, CIOs and chief digital officers where women are much more numerous. There are “general managers on their way up, division presidents, heads of nonprofits and academics,” says Bonnie Gwin, chief of Heidrick & Struggles’ board practice. notes. Helene Lollis, head of Pathbuilders, which advocates women in business, says that “many top women executives today are in marketing and HR roles, not the ones where they’re typically coveted for the board. So, you have to open your lens on what makes a corporate board member.” Sometimes it’s a matter of thinking more broadly. “Someone may have a compliance or HR or consulting background, and they’re active in their industry and their community,” says Nicole Crum, head of the board practice for the Sullivan & Worcester law firm. “They may have leadership and engagement experience and an overall impressive background—but they don’t show the climbing of a particular corporate ladder.”
3. Rule of three. No matter how large the board, having three female directors tends to create a transformative critical mass. “When there’s one, she’s like a token,” Lollis says. “When there’s two, it still defaults to, ‘What do the women say?’ But when there are three, it’s almost as if there’s an opportunity for them to be actual individuals.” Idie Kesner, member of a number of corporate boards and dean of the business school at Indiana University, says, “Sometimes three women, regardless of the size of the board, can get the flywheel going, even if it’s not 50 percent represented by women.”
4. Size of the pie. Companies may dilute the impact of new female directors by simply adding them to the board instead of subtracting existing directors. “They incorporate a female member but are not reducing the number of male board members,” says Seema Pissaris, a business professor at Florida International University. “This strategy can be beneficial because you don’t have to wait for a male director to turn over, but then, male directors continue to outnumber female directors by a large margin.” Also, boards may add women only to replace other diverse directors in a sort of counterproductive quota system. “There can be a sense that white men stay at 80 percent, and the rest of the board—you figure out what kind of diversity you want, but you only get 20 percent,” says Patricia Lenkov, head of Agility Executive Search.
5. Roll downhill. Companies are also seeing more female candidates for inside-director jobs. “Technology and STEM jobs are pulling more young women along, making for a lot of extremely intelligent, experienced women who are making a move on corporate governance,” says Amy Rojik, a partner with BDO’s national assurance practice. Crum notes that, “Once women are in these positions, they have networks and relationships with people who also are open to being on a board. It’s a dimension of diversity. You’re hoping for a snowball.” Gwin advises companies to “think of this as a long-term succession-planning project. Then you can proactively meet great [female] talent even if you don’t have a board opening today.”