Achieving Gender Equality

Achieve Gender Equality Advancing the roles of both genders through discovery, discussion, education, leadership and adapting our values to allow women and men equal opportunity to a career, parenting, financial security and personal enrichment.

Dysfunction in the boardroom

Thursday, May 30, 2013

Boardrooms continue to attract attention and stimulate debate the world over. During the past few weeks three quite different articles crossed my path which begged the question, 'What is the current priority regarding board performance?' As many companies continue to struggle in meeting targets, it is right to ask 'How are boards looking to improve their performance?'; performance that would benefit the companies they govern?

What does 'dysfunction in the boardroom' really look like?

The three articles I referred to above, left me wondering about the degree to which the issue of diversity on boards is being taken seriously – anywhere in the world. The first article was about the lack of change in the gender composition of US boards in the past 6 years; the second was about how the Chairman of a global company says he can't find competent women; and the third was about the inappropriateness of CFOs being board members – an issue which was debated back in the 1980s and not one I would expect to win news coverage over 'the diversity imperative required to boost boardroom performance'.

Take a look at the three articles and you'll get my drift:

  • The most interesting of the three articles was Boris Groysberg at Harvard Business School who published 'Dysfunction in the Boardroom' outlining his findings of research with male and female board members in the USA. He adds the countries that are losing patience and lists Belgium, France, Iceland, Italy, Norway, Spain, and the Netherlands as the ones that have legislated to speed up the pace of getting women onto boards. He also provides details of the number of women versus men who agree with quotas and shares his profile of the typical 'female director'.
  • Then came The Telegraph's article headlined 'We can't find capable women', which reported that the Chairman of Royal Dutch Shell Jorma Ollila was 'pleading for patience' as he tried to find suitable women for his board. He told shareholders that he was still searching for 'females who really have the ability to contribute' to the board. Given that Groysberg's article above reminded us of the biases in board selection and the much higher bar women have to jump over to get to a board, Ollila's pleas for patience seemed inexcusable. The facts are clear, male dominated board cultures establish behaviours and expectations that women rarely meet. Assumptions underlying boards' cultures need to change before we will see a rapid rise in female participation.
  • Lastly, 'Boards no place for CFO's' appeared in the Australian Financial Review and my first thought was 'Have they reinvented a news item from last century?'. No, they are reporting on issues debated at the G100 summit (a gathering of CEO's of global businesses) that took place in Sydney recently. I'm confused, how could an age-old issue like 'Should a CFO be a board member or attend the meeting as a guest?', trump the most pressing issue the world over – Boardroom diversity, in particular gender equality – for newsworthiness?
Future priority of boards

It would seem that the real dysfunction in boardrooms is the lip-service paid to addressing the diversity issue and the lack of acknowledgement that board performance is quite possibly, seriously undermined, because of it. The underlying assumptions about gender and people of different cultural backgrounds, and the bias in selection – conscious or unconscious – that comes from years of believing that women are not capable enough are the underlying problem.

The board chairman who acknowledges the underlying causes of the problem (boardroom culture, organisation culture and country culture as discussed in Chapters 8–11 of Stepping Up) and who seeks to change attitudes, behaviours and selection criteria, will strengthen and grow his board and the company it governs beyond all recognition.

One of the most memorable quotes from the 100 interviewed for Stepping Up is:

            'I don’t know how a man can walk into a boardroom with 10 others that look like him
            and not feel like a fraud. If you want to promote your buddy, okay, but don’t then say
            you are all about meritocracy.'

                by Paul Waterman, President. BP Australia, Melbourne, Australia

Chapter 7 of Stepping Up, is called Gender Equality and raises many more issues obtained through the interviews with the 100 leaders. It also highlights the recommended solutions for changing the status quo. Once you have read their views, ask yourself what you can do to help shift the attitudes that create the behaviours people want to see changed. We can all contribute and you'll find some ideas in Chapter 10, Redirecting Individual Culture.

Postscript - The statistics presented in this article (which crossed my 25 inch screen after this post went live) tells the truth: boards with a higher percentage of women outperform boards with lower percentages - see Quartz news article 'It's dumb not to fill your company boards with women'

Thanks for stopping by – please share your thoughts below.
Before you go, you might want to read a little more about the benefits of diversity:

•    Goldman Sachs outlines the $195b advantage of gender balance in the workplace
•    Downing Teal spells out the benefits of cultural diversity in WA, Australia
•    The Australian Government's plans for building workplace diversity

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