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Getting women on Board
Monique BachnerBachner [email protected] +352 621 514632
1Luxembourg, December 2015
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Outline• Current Situation • statistic, myths and correlations
• thoughts on the objectives of equality and of quotas
• Why become a Director?
• How? • Board readiness myths
• Board-readiness preparation
• On Board… ... and now what?
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Women & Boards – some statistics
%
29% of European Boards contain no female Director (EU Commission 2012)
=> Only 3% female Board Chairs
GMI Ratings’ 2014 Women on Boards survey(6,500 companies in 45 countries)The Good News, There Are More. The Bad News, Not That Many
=> 12% of directors globally ( 3.1% since 2009)
=> 36% Boards with no women globally=> 13% with ≥ 3 women (critical mass)
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Oct 2013:
17.8% women on EU listed companies(EU Commission)
but 29% have no women
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As at 9 Oct 2014=> 12.5% of Directors on Boards of 1500 S&P 1500Þ 4% = 67 female CEOs of 1500 S&P 1500Þ If female CEO, average of 28.6% female
Directors (i.e. 29% more women on their boards (excluding the CEO herself))
FTSE 100: Oct 2015:- 26% women Directors(31% of NEDs 9.6% Exec Directors)
Women & Boards – some more statistics
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Source: MSCI
Women & Boards – correlations?
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Going beyond “Pale, Male and Stale”Beyond the comfort zone• Unconscious bias to recruit in own image
• Requires conscious planning, effort and thought
• Beyond existing default networks “There are no qualified women”… ??• … none in my existing network? nor on my existing boards…??
and none at at my (all-male) Rotary club …• May need to broaden profiles – if no active female CEO
available, would a COO still be appropriate?
• Role of Board Evaluations => Boards should check what they need (no use to simply add more of what they already have)
• Women are generally more cautious Women must learn to negotiate -- men negotiate, women walk away• “Men fear not having enough;
women fear not being enough”
• Professionalization of Boards– real work & real responsibilities
• Professional Boards need to move towards professional recruitment practices
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ESSENTIAL READING: Lord Davies Report on Diversity (UK, 2011 & 2014) http://www.bis.gov.uk/news/topstories/2011/Feb/womenonboards
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Case Study 2012:ArcelorMittal Listings: USA, UK FTSE, Luxx
18% women (2 of 11). Age gap female:maleOther metals companies av. 4.7%Good geographic diversity
Observations:• Often easier to recruit women externally
as independent Directors than to promote them internally to senior roles
• Board evaluations & professional recruitment (beyond network)
• Internal programmes to develop internal candidates – the pipelinee.g. deliberately promote women to Boards/Leadership positions in subsidiaries
The Societal Case: justifying quotas?
Women on Corporate Boards (Huse, Vinnicombe, Singh, Burke, Bilimoria)• What is the objective for the law? What is the correct discussion?
• The Individual Case• Tokenism• Glass ceiling• Career
• The Societal Case• Power balance• Democracy/
Conventions • Fairness /
ethics
• The Business Case => value creation• (Deep) Diversity (vs. surface diversity)
• Competence• Critical mass
Value creation: what type of value? for which group? Not enough known about HOW boards are influencing COMPANY value creation and accountabilityMcKinsey 2007 – if at least 3 women => outperform.
Often firms with more women were those with quality management & organization. Correlation?
Thompson Reuters 2013 - gender diverse boards outperformed male-only ones
Credit Suisse 2012 – gender diverse boards outperfomed by 26 % over six years.
(Source: Professional Board Forum website - http://www.boardsforum.co.uk)
Sir John Bond, Chairman, Vodafone plc: “It cannot be right that only 12% of the FTSE100 directors are women. It is not due to lack of female talent; chairmen have to do a better job. ….”Glen Moreno, Chairman, Pearson : “it is difficult to find really good NEDs so you need a wider talent pool…. Third, in terms of a company’s values and culture, it’s simply the right thing to do.”
The Diversity Difference?Need to understand the human / behavioural aspects:• Different Values?• Different Professional Experiences?• Different Background?• Different Equality perceptions?
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Why become a Director? • Advantages of being a Leader and/or a Board Member • Huge learning experience• Think differently – very high level overview of many items• Leadership positions• It is where the action is – decision makers of our societies • Political aspect, as well as private enterprise• Increased cachet, visibility, network (including for advancing your
other projects and advancing career generally)• Usually pays well• It can be FUN!
• Personal• Personal development opportunities => Your Plan• Become comfortable with ambition … in your way 8
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Board readiness (1)The Myths• Myth 1: The need to recruit someone with pre-existing Board experience• Everyone starts somewhere • Boards should be diverse – age, gender, experience, geography, backgrounds, ….• Board Skills should be seen by the Board as a whole - each Director contributes
different skills• Board skills can be learned
• Myth 2: There are no qualified women• Then they aren’t looking hard enough… often relates to Myth 1 (& visibility)• How do they feel about their daughters? Easier to see same image ….
• Myth 3: You need to be in top management• Diversity• Management skills ≠ Board skills => high level, broad knowledge
• Myth 4: You need financial skills• Not exactly a diverse Board if all are ex-accountants…. but useful to learn basic
balance sheet reading and analysis skills 9
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Board readiness (2)Getting Board Ready• Personal development plan• Get a mentor, an executive coach or your own personal board of Directors
• We all need guidance and honest feedback => get yours before the interview…• Concrete goals are great for overall career director – whether on a Board or not• Become comfortable with being ambitious and with YOUR ambitions. Dream Big ;)• Read personal development books; Attend personal development courses
• Write a Board Mission Statement (and write another for each application): • Why do you want to be on a Board? (… to this Board)• What will you contribute to a Board? (… to this Board) (e.g. relevant, transferable skills and
experience). Steps you have taken to building a NED portfolio (and think about those you should be taking…)
• Consider your target companies, sectors, scale and geography• Be clear about what you want – to yourself & to others• Think skillsets, not positions
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Board readiness (3)Getting Board Ready – Skills and Experience• Increase Visibility• Network – with men as well as women• Volunteer for a project, a white paper, and Article, ….
• e.g. internal or for a charity or trade org• Look at the skills required for your next position and try to get them.• Think of tasks where you can show you are a leader. • Most positions are filled by word of mouth – these people could be your entry points…
• Volunteer to give a speech
• Get Board and committee experience via a non-profit• “Try before you Buy”
• Join the Board of a Charity (or a committee – esp. audit committee)• Be seen as a peer, and as someone who can get thing done• BUT… won’t always translate – choose Charity and projects carefully
• Consider whether any formal training is appropriate / required
• Let people know you are interested in Board positions• Network - most positions are filled by word of mouth• Get on lists and attend events for persons interested in Boards
• Board Ready Women, 30% Club, Female Board Pool database, Women Corporate Directors, etc…• Alumni databases e.g. universities• USA: GMI Ratings Diverse Director DataSource (3D) – recently commissioned by CalPERS and CalSTRS, two of
the largest public pension funds in the U.S. to identify diverse candidates.
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Once you are on-board… Tips for making it a success….• Due diligence before joining a Board – ask questions• Understand -- why have you been approached?
-- what are you expected to contribute?-- what do they offer you? -- how does this fit your objectives?
• Listen, learn & absorb• Speak where needed. You do not need to contribute or have a say on everything • Ask questions where required• If feeling discounted and not listened to, take it offline and deal 1:1• Tune into the group dynamics and its history (& attend Board dinners /social events)• Be group savvy => emotional intelligence
• Remember who is the boss e.g. a Director in a family-owned enterprise may need to listen more to the shareholders (but avoid being manipulated/bullied by them…)
• Keep your skillset updated and relevant• Join a Directors organisation• Learn basic company law & financial skills e.g. how to read a balance sheet• Read, and learn
• Use your common sense and be conscientious – turn up for all meetings,
Be prepared, Be conscientious. Remain authentic. Remain as independent as possible
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