Despite calls to action from a swelling number of advocacy groups and the investment community, women remain drastically underrepresented in the boardrooms of Corporate America. A Business Journals study published last month found that men outnumbered women by a six-to-one ratio in the boardrooms of the 3,000 publicly traded companies included in the study. That ratio increases significantly for companies with market caps under $1 billion.
In honor of International Women’s Day in March, Nasdaq’s Governance Clearinghouse is publishing a series of articles that will explore practical solutions to closing the gender gap in public company boardrooms. To kick off this series, we’ve invited Coco Brown of The Athena Alliance to share her perspective on the top barriers women face when breaking through the boardroom ceiling.
We want our readers to join this important conversation: What ideas or approaches do you believe would improve gender diversity in the boardroom? Send your ideas to email@example.com no later than February 28th. We will compile the most compelling ideas and publish them on International Women’s Day in March.
The Athena Alliance has a unique boots-on-the-ground role in moving the needle towards gender parity in the boardroom. Because we serve on the front lines of this initiative, we have a close-up perspective of the obstacles women face as they seek seats at the table. A lack of motivation and absence of a cohesive effort on the part of corporate America are still formidable obstacles to resolving this issue, but some of the barriers women face are self-inflicted—and it’s important to shed light on that side of the equation as well.
Here are the five key barriers that we believe are obstructing progress towards gender parity in the boardroom:
1. Traditional board configurations severely limit the pool of qualified female candidates.
This issue is resolving itself organically, but slowly. As the fiduciary mandate of boards has expanded to include oversight of forward-looking risks and opportunities, boards are beginning to view themselves through an investor lens to self-assess for collusion, insular thinking, and lack of relevant skillsets. A traditional board configuration of sitting and former CEOs and CFOs can leave a board with critical skill gaps.
There are relatively few female CEOs to choose from when recruiting board members, which has contributed to the perception that the female executive talent pool is shallow. However, as boards begin to cast wider nets in search of relevant, modern skillsets, they open up seats to a deep well of qualified female candidates. There are many women with tested leadership experience in disciplines that modern boards need, such as engineering, digital technology, cyber risk management, supply chain management, operations, marketing, organizational structure and people.
2. There is no champion galvanizing the majority to resolve this issue.
As boards seek to broaden their skillsets, they could potentially accelerate progress towards gender parity by creating new opportunities for women to make meaningful contributions in the boardroom. While promising, this trend alone is not enough—women must have genuine access to these opportunities at a proportional rate to men, and men have to want to bring them in.
It’s very difficult to create balance from imbalance without buy-in and intentional action from the majority in power. Men occupy 80-100% of decision-making seats on the average board, and therefore are in the best position to move the needle. Yet many men do not see a problem with gender imbalance, and/or do not believe there are enough qualified women to fill board seats.
Boardrooms began to diversify rapidly in the U.K. when Lord Davies championed the cause. An iconic male business leader in the U.S., who has the clout and charisma to coalesce efforts of the investment community and advocacy groups, could build powerful momentum towards moving the needle.
3. Boards aren’t accessing diverse networks in their recruitment process.
Most boards rely heavily on their own networks to fill a candidate slate, just as professionals leverage their networks to find new job opportunities for themselves or fill jobs within their own organizations. The average profile of a board director is a 63-year-old white male. 60-year-old white men are mostly surrounded by other 60-year-old white men (and younger men who remind them of themselves). Women do this too, and so do people of different ethnicities and backgrounds. The problem isn’t the method—it’s access to diversity.
Progress hinges on opening up and expanding isolated and insular professional networks. In the absence of an iconic male business leader who can galvanize a movement to increase diversity in the boardroom, we need to create an organic groundswell by exposing influential men to networks of board-ready women.
While there are a growing number of databases cataloguing executive “board ready” women, these are not going to move the needle appreciably. Databases are essentially a collection of digital resumes. I personally have not obtained a job through a resume since I was 23 (and I’m not sure I did even then). It’s all about networks. To be useful, static databases should be brought to life through face-to-face interactions.
Zack Rosen, CEO of Pantheon, recently attended an Athena Alliance event, one of only seven men who showed up out of 100 male executives invited. Zack emailed me the next day, stating that our event was “hands-down the best event I have attended all year.” Why? Because although he showed up to show solidarity with our organization, he wound up leaving with unexpectedly valuable business contacts. “I never make that number of high-impact connections at one event. All of the women I interacted with were rare talents,” Zack shared.
Zack was introduced to me through one of his investors, OpenView Venture Partners. Their senior managing partner, Scott Maxwell, also saw this sort of power in the Athena Alliance community and sent three CEOs from other companies in OpenView’s portfolio to Athena’s Seattle launch, who were in turn equally impressed and pleasantly surprised by how easy it can be to diversify their own top tier network in meaningful ways when motivated to move beyond the usual events and circles. These grassroots “guy-talking-to-the-guys” testimonials are an authentic and very effective means of bringing talented women into powerful male networks.
4. Women aren’t always visible, or aren’t visible in the right ways.
Women professionals limit their visibility in two ways: spending too much time in circles of women, and failing to realize their own worth.
Working women have long relied on the support of women’s conferences, women’s affinity groups, and women’s business groups. By gravitating to gender-specific organizations, women are guilty of exactly what we accuse men of doing—limiting our networks to people who are like us. Women should instead build networks that include and leverage powerful men.
A side effect of underrepresented groups is too few role models. When women perceive that only the Sheryl Sandbergs and Meg Whitmans are qualified for board service, they incorrectly assume that they aren’t yet at the right stratosphere to make themselves visible. It always shocks me (yet it happens often) when we invite a highly-qualified woman to join Athena Alliance and discover she has no idea she is of value to a corporate board.
Women who do land on a slate of candidates need to elevate their representation of what they bring to the boardroom. When we coach Athena Alliance members for board interviews, we instruct them to take off their business operator hats and instead think holistically about their careers, experiences, and touch points to industry. We ask them to consider what they can bring from that perspective to boardroom conversations about global business risks and opportunities, emerging threats, and disruptive technology developments. If a candidate focuses too much of her interview on how she executes her day-to-day operating role, the board may underestimate her ability to function at a higher stewardship level.
5. Women aren’t always qualified in the right ways.
As women take a long view of the career roles and experiences that will enhance their value to public company boards, they need to understand that boards always use open seats to think about going from “here” to “there.” Boards recruit candidates who are where they are heading, not where they are or where they’ve been. They also seek candidates with a strong degree of currency and connection to the markets and industries their companies operate in.
Given that parameter, there are several factors that can eliminate a woman for board service:
- She has been out of the C-suite for five or more years, so is perceived as lacking current relevance and an innovative edge.
- She has been a consultant for more than five years (unless she is a partner at a large leading global consultancy or is broadly recognized as an authority in her discipline).
- She has served as a top executive for only smaller cap companies that generate less than $300M in revenue.
That said, there are many women who are not on the SEC filings of public companies who should be considered qualified for board service. These women represent the top 10% of their company’s leadership and have had certain professional experiences that make them valuable in the boardroom, including:
- She has significantly scaled a company in size, serving as part of an early or founding executive team that took a company public or through a significant acquisition.
- She is part of a senior leadership team that grew a company from a small-cap to a mid- or large-cap.
- She holds a large domain of responsibility, serving as CxO or VP of a large function or business line within a company of significant size and stature.
- She holds a high-demand leadership role, such as CMO, CTO, Chief Product Officer, COO, or CIO in a company of $300M in revenue or greater in size.
It also helps to have served on notable non-profit boards, as they are governed like public company boards and are a great proving ground for board leadership.
Please join this important solution-oriented conversation and share your perspective on how to close the boardroom gender gap. Send your ideas to firstname.lastname@example.org no later than February 28th. We will compile the most compelling ideas and publish them on International Women’s Day in March.
Coco Brown is founder and CEO of The Athena Alliance, an organization dedicated to advancing diversity in the boardroom by preparing executive women for board service and facilitating board matches. Before founding the Athena Alliance, Brown served as the president and chief operating officer of Taos, an information technology consulting and services company based in San Jose, California.
The content does not attempt to examine all the facts and circumstances which may be relevant to any particular company, industry or security mentioned herein and nothing contained herein should be construed as legal or investment advice.
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