France's recent dictum that boards of directors of native companies must have at least 20 percent of their membership made up of female directors has reignited the debate about the lack of women in U.S. boardrooms. In late 2010 the professional association Women Corporate Directors (WCD), along with the consulting firm Heidrick & Struggles and Boris Groysberg of Harvard Business School, released a telling survey on this very topic. The study of some 300 female and 100 male board members in both public and private companies revealed sharp differences—not only in their perspectives, but also in how they were placed on boards in the first place. To learn more, Bloomberg Businessweek columnist Beverly Behan spoke with WCD co-founder and co-chair Susan Stautberg. Edited excerpts of their conversation follow.
Beverly Behan: Susan, France obviously sees merit in imposing quotas for board seats held by women. A similar initiative introduced in Norway some years back required 40 percent female representation on that country's boards. Is this concept of quotas for female board members catching on in the U.S. as well?
Susan Stautberg: No, U.S. directors—both men and women—are opposed to quotas. Our study showed that over 90 percent of the male directors surveyed and nearly 60 percent of the female directors disagreed or strongly disagreed with imposing a required percentage of women on U.S. boards. I'd point out that this is not a situation where U.S. boards have made more significant progress in terms of female representation than French boards have done. The proportion of women on the boards of the Fortune 500 has stayed relatively unchanged, at about 15 percent, for several years.
Your study highlighted the different perspectives between male and female directors on a number of issues, particularly the question of rebuilding trust in boards of directors in the aftermath of the financial crisis:
40 percent of the female directors agreed or strongly agreed that enhanced risk management systems would serve to rebuild trust, but less than 1 percent of the male directors did.
45 percent of the female directors agreed or strongly agreed that new executive compensation regulations would rebuild trust, but only 22 percent of the male directors did.
38 percent of the female directors agreed or strongly agreed that the new proxy access rules (now on hold pending litigation by the U.S. Chamber of Commerce) would rebuild trust in corporate boards, vs. 17 percent of the male directors.
Susan, in your view, what accounts for these sharp differences of opinion?
I think women generally are a little less vested in the "status quo" and more open to questioning traditional ways of doing things and trying new ideas. Men, on the other hand, seem to have a little more faith in the concept that "this is the way things are done." While it's unfair to generalize entirely across gender lines, I have found men somewhat more resistant to adopting new practices than women [are].
More than one-third of the male and female directors studied indicated that there were skill sets missing on their boards. That suggests that a lot of boards need to do some recruiting. Yet it took the male directors in your study 1.4 years on average to find a board seat, vs. 2.4 years for the women. Why is it taking so long for well-qualified people to get board opportunities—and why is it taking an extra year for the women to do so?
One of the reasons I co-founded WCD and am so proud of our work is that we are committed to providing board opportunities for well-qualified women. Some of the opportunities are surfaced through search firms contacting us for candidates; others are from our own members. For example, one of our members was about to step down from one of her boards. She asked us for a list of 10 well-qualified women that her board could consider as possible candidates and we were able to quickly furnish her with a terrific list. In fact, the board couldn't decide between two of the female candidates on that list and recruited them both.
In our study, the 100 or so male directors we sent the survey to had all been placed on boards by Heidrick & Struggles. The 300 female directors were WCD members. I think the finding illustrates that many women are expanding their efforts to find a board seat beyond the traditional vehicles, such as networking, to identify and be considered for board opportunities. Because of this, it's taking many of them an extra year. That said, I do find that many boards are going beyond the traditional [chief executive officer] or [chief financial officer] profile in recruiting directors. Many are looking for global branding specialists or supply chain expertise—and that has caused them to look at a broader candidate pool, which often includes many more women than a director search aimed solely to identify sitting or former CEOs might do.
There is also the old Catch-22 about previous board experience. Many boards will not consider candidates who haven't been on a board before; both men and women who are well-qualified but lack prior board experience are screened out on this basis. We often tell WCD members to first get onto a smaller board or a not-for-profit board as a means of getting some board experience. However, a female executive currently working in a senior role at her company is usually not going to be allowed to take on more than one board seat by her employer; same for male executives. So this is an ongoing challenge for new director candidates of both genders.
A question in your survey asked whether women bring special attributes to a board. Notably, 90 percent of female directors and 56 percent of male directors agreed or strongly agreed with that statement. You've worked with hundreds of female directors over the years, Susan. What do you think those special attributes are?
As we discussed earlier, I think women are a little more apt than men to challenge the status quo, and that translates into the questions they ask in the boardroom. Women have a little bit more humility and are often more confident about saying: "Gee, I'm new to this and don't understand what this means. Can someone explain this to me?" or "Why are we doing it this way?" This results in some excellent and probing questions that put important issues on the table and make the entire board and management team take a fresh look.
I also think many women directors are sensitive to issues of corporate culture and corporate values—perhaps more so than their male colleagues. They are concerned not only about the culture of the company they are governing [but also] about the culture of the board: Is there good debate going on? Is there a clear culture of integrity and ethics? Is there a tenor of mutual respect?
The fiduciary responsibility of a corporate board can most easily be met when the best people are chosen to serve. Board diversity is a business imperative—it is multigenerational, multinational, multicultural, and multiregional. Understanding these differences in perspective, attributes, and the different roads into the boardroom can be useful for many boards—and the men and women who serve on them.