By Maria Moats, PwC Governance Insights Center leader, and Shannon Schuyler, PwC Chief Purpose and Inclusion Officer
The board plays a critical role in bringing an organization’s strategic vision to life. As stewards, they help guide the organization through challenging times and are responsible for providing sound oversight that can help to sustain future success.
Ideally, the people sitting around the table in a corporate boardroom will each provide different sets of skills, areas of knowledge, and varied work and life experiences that collectively make the board stronger. But when too many sitting directors have similar backgrounds, diversity of perspective can suffer.
Increasing board diversity is by no means a new discussion. There are a number of benefits to board diversity, and directors have shared how valuable it is. According to PwC’s Annual Corporate Directors Survey, directors agree that increasing board diversity brings unique perspectives to the boardroom (93%) and improves relationships with shareholders (90%). More than four out of five say that it enhances board performance (85%), and about three-quarters agree that it improves strategy/risk oversight (76%) and company performance more broadly (75%).
With developments like the new Nasdaq listing requirement, we are already seeing some positive changes. In addition, large institutional investors and other stakeholders are also demanding more diverse boardrooms, but the fact remains—only 30% of director seats at S&P 500 companies are filled by women.
While mounting pressures are helping to combat this discrepancy, men still greatly outnumber women in the boardroom—and there is still a lot of work to be done to provide equal opportunity. In order to unpack how best to increase women’s representation at the board level, we should look at where boards and management teams typically find their director candidates.
The Director Candidate Pool
Traditionally, when looking for new director candidates, boards and management teams look for retired or sitting CEOs and other C-suite executives due to their level of experience. However, when you look at the breakdown of women in the S&P 500 who are currently in corporate leadership roles, only 26.5% are in executive senior-level positions and just 6% are female CEOs.
While there are ways to cast a wider net and broaden your candidate pool beyond that of traditional avenues, as well as ways to create opportunities for board composition changes in the short term, there should be a long-term solution. Without a changed mentality on how to support women in the workforce throughout their careers—one that helps elevate them to leadership and executive roles—we’re unlikely to see significant progress for women.
Providing support to foster female career growth at every level
Supporting women’s career growth from the onset of their professional journey and throughout it is of the utmost importance. By working to eliminate obstacles and providing them with the flexibility, benefits and mentorship they need to succeed, we can help elevate more women into leadership roles, executive roles and, ultimately, roles in the boardroom.
There are other challenges that women in the workforce face, especially when it comes to responsibilities outside of the workplace, like caregiving. Whether they’re caring for their own children, disabled loved ones, elderly parents or ailing family members, the role of caretaker and the associated responsibilities often fall on women’s shoulders.
Additionally, many women face cultural and systemic hurdles that make it harder for them to rise into leadership positions. That’s why providing support and equitable opportunities for women to advance their careers is so critical. Here are ideas—some of which we’ve incorporated at PwC—for where to start:
- Foster career development: Design programs that help engage, motivate and retain diverse talent. At PwC, we launched Enrich: a multi-dimensional experience designed to cultivate the leadership of female and racially/ethnically diverse senior managers and directors. We aspire to increase our female pipeline of potential partners by 50% by 2026.
- Build flexibility into benefits: There is not a one-size-fits-all approach to navigating responsibilities outside the office. Offering a number of flexible work options and care benefits can help to better balance work and personal responsibilities.
- Create upskilling opportunities: Create more learning and development experiences for women and ethnically/racially diverse executives. For example, PwC’s Trust Leadership Institute aspires to dedicate at least 50 percent of the targeted 10,000 seats to women and/or racially or ethnically diverse executives.
- Promote allyship: Engaging the majority to advance women in the workplace is also fundamental to change by fostering understanding and providing training to help your people lead candid conversations and engage in acts of inclusion and allyship by leveraging their own privilege to help support women.
Building Up Tomorrow’s Women Leaders
With the right support, women can have the personal lives they want while leading organizations. As leaders, people in powerful positions should leverage their influence and help to provide equitable growth opportunities to future women leaders as well as the tools they need to excel in their careers. This, combined with access to benefits that offer more flexibility, will allow women in the workforce to thrive, grow and rise up the ranks into prominent leadership positions, paving the way for more seats around the boardroom table.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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