The concept of diversity applies to many factors besides gender, but gender diversity should be the easiest for your board to tackle, given the number of women floating around, so let’s focus on that.
A highly effective board should be representative of the community, or stakeholders, it exists to serve. This makes sense, right? You need people who understand the needs and wants of your organisation’s stakeholders to effectively govern your organisation. Agreed.
I defy anyone to find an organisation or board that doesn’t have any women among its stakeholders.
For a start, women make up 52% of the Australian population and 45.6% of the total labour force.
Eighty percent of purchasing decisions are made by women, which makes the fact there is a real under-representation of women on retail boards all the more mystifying.
Even the AFL, an organisation that has traditionally been thought of as male, now has female leagues and a huge female following. And even before women pulled on footy boots, this bastion of male authority and interest had a 43.1% female TV viewing audience – and we all know how important broadcast rights are to the AFL.
There is no excuse for not having women on your board. And not to is just plain stupid. These statements aren’t opinions, they’re facts, backed by countless studies that have demonstrated that board diversity leads to better organisational performance.
A Catalyst report showed that Fortune 500 companies with more women on their boards performed better financially, on average, than those with fewer or no women.
Closer to home, a 2011 study found that companies in the ASX500 with women on their boards reported a significantly higher return on equity than those without.
In the United States, Wells Fargo analysts Jeffrey Donnelly and Dori Kesten analysed the gender composition of 165 real estate investment trusts. Looking at data from 2006 to 2017, they found that companies with a greater than average percentage of women on their boards outperformed their competitors on the basis of price return and total return.
Having women on your board leads to smarter decision making. A US study published in the journal Science in 2010 found that while there's little correlation between a group's collective intelligence and the IQs of its individual members, if a group includes more women, its collective intelligence rises.
The finding is not saying that women are smarter than men. It's saying that when there's gender diversity in the group, the collective intelligence of that group increases.
For those who bemoan the fact that they find it soooooo hard to find women for their boards, here are some tips to accelerate change:
Consider quotas. Quotas are a tricky issue. I'd love to be able to say that quotas are unnecessary, but I think they are needed in some areas to bring about real reform – one reason why the government has introduced them.
If introduced properly, quotas do not mean a drop in standards or a drop in the number of people appointed on “merit”. (If you buy into the “merit” argument, consider this: do you really believe every man on every board in the country is there because of his superior skills, vast experience, outstanding qualifications and general brilliance?)
Offer (or seek) mentoring. Mentoring has proven to be a valuable avenue for new board members, enabling them to learn and be guided, and its absence can be a real obstacle for women wanting to forge a board career or undertake volunteer work with a board. Ensure your organisation has a mentoring, training or development program. It doesn't even need to be particularly formal. And for you as an individual, it is never too late to seek out a mentor, either.
Try training. The Institute of Community Directors Australia offers a Diploma specifically aimed at board directors in the not-for-profit sector. The Institute has offered two rounds of diploma scholarships to women and both have been over-subscribed. With knowledge comes empowerment.
Use your networks. A lot of people end up on a board because of who they know. “I know someone who would be fantastic at this,” somebody says. “Shall we approach them and bring them on board?" You probably know a bunch of talented women you could recommend for your board.
Encourage and empower women. Boards and board members are influencers. They have the power to make a difference. Use it for good.
Keep up the pressure. No-one ever gave up power willingly. It's important that there is strong and continued pressure on the issue of gender diversity. Make sure you do what you can within your own board environment.
Actively recruit and promote women. If you’re on a board's succession planning committee or in a human resources role, you have the power to make a difference to the diversity of senior management and the board in your organisation.
Offer flexibility. Get your board members to discuss what meeting arrangements work best for them. Teleconferencing? Meetings during school hours? Evening meetings? Flexibility will enable more people – for example, people who have childcare or eldercare responsibilities – to join your board than you otherwise might be able to get. Board diversity isn't just a women’s issue, of course. Many men have primary caring roles too.
Dispel the myths about boards. When you hear people disparaging boards as "male, pale and stale," or asking, "Why would you serve on a board? You don't get paid for it? What's the point?", dispel the myths. It's a really positive and fantastic thing to do.
And remember, the principles and benefits of gender diversity on boards are applicable to any kind of diversity – multicultural representation, indigenous representation, or representation by people with a disability or young people, for example.