It is not unusual for even large corporate boards to have no women or minorities

Question

It is not unusual for even large corporate boards to have no women or minorities on them. In the U.S., women held 16 percent of board seats at Fortune 500 companies in 2012. In her 2013 book, Lean In, Sheryl Sandberg points out that this number has been flat for 10 years—or, as she puts it, there has been no progress in the past 10 years. In Europe, of the total number of board members in Britain, only 12 percent were women; Spain, France, and Germany all had less than 10 percent. In Norway, by contrast, female members comprised 40 percent of the boards.
So how did Norway do it? In 2005, the government of Norway gave public firms two years to change their boards’ composition from 9 percent female to 40 percent female. Is this a good idea? Spain, Italy, France, and the Netherlands must think so: Each country is considering implementing a similar quota (though generally with more than two years to implement it).

Why has representation by women on U.S. boards not increased over the past 10 years?

What actions could be taken by companies to increase participation?

What actions could be taken by women who seek to be directors?

Explanation / Answer

1. Representation by women on U.S. boards has not increased over the past 10 years for the reason that a board needs bonds of trust within boardroom. To ensure that trust levels are maintained and not diluted the existing board members go their network. Majority of the network (more than eighty percent in fact) consists of men. So the prospects if more women being on board declines significantly due to this.

Secondly, there is an unconscious bias in the minds of CEO and most CEOs feel more intimated and more challenged by women than men.         

2. To increase participation companies are required to sponsor women who are ready to join a board. Secondly companies and organizations must make visible commitments with regards to diversity and should look at sustained action throughout the organization. Thirdly companies should set new principles for decision making. An example can be including women on every candidate slate. Fourthly companies and organizations can maintain an active pipeline of women candidates by cultivating long term relationships with prospective candidates.

3. Women, who seek to be directors, should tangibly demonstrate the value addition that they will bring by being a part of the board. Secondly they should be explicit about their ambition so that the management is aware of your ambitions and hence will be in a position to evaluate your ability. Thirdly women should understand duties of a board member and should start thinking like a director. This will directly translate into higher visibility for that woman as a suitable candidate for boardroom.

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