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 US, 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 per-cent 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).

Questions

d. What other methods could be used to increase female and minority participation on corporate boards? Should it be perceived as a problem when a company seeks minority women as directors so that both statistics rise? What data would you gather in order to verify that such appointments are sincere?

Explanation / Answer

The number of female and minority members on the boards of companies has always been a problem for the governments worldwide. Even in 21st century we are not able to provide women equal participation on company boards though governments of some countries have tries and become successful but in general the situation is not good.

The methods by which female and minority participation can be increase on corporate boards are:

With reservation it will become necessary for companies to keep females and minorities on board and they will also devote some of their resources in producing such people within their own companies. One of the problems I see in less number of female participation on board is companies’ say that they are not able to find qualified female members to be appointed on board but these companies do not try to prepare such leaders

By making law to have certain percentage of females and minorities on board no company will try to avoid this and that is how situation can change.

Yes, it should be seen as a problem where a company seeks minority women as directors to show a rise in statistics. The problem is that the companies are not serious about appointing females on their boards and this needs to change. They are only looking after raising their statistics so that it will look good on paper and they will be safe from scrutiny.

The situation needs to change and to overcome this problem it should be made mandatory that a female member will be either counted as a female or minority. This will stop the practice of companies appointing a female minority member on board just to raise the statistics.

The data which I would gather to check the sincerity of such appointments are:

If the companies are only appointing female and minority board members just for the legal requirements and raising the statistics then it should be avoided and the companies should be asked to be sincere in the appointment of such members.

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