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Why Do Women Directors Matter? - Equality in the Boardroom

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The second part of the success equation is to change the corporate culture. Many cultural biases are so entrenched they’re not even noticed until they’re gone. Much of it has to do with the day-to-day realities of the workplace — how a woman is evaluated by her manager, how people are selected and groomed for promotions, and who gets picked to lead the high-visibility projects. There is also frequently a gap between a company’s stated “people philosophy” and the realities women face. It’s a gap that’s only bridged when women can articulate their experiences and participate in a dialogue that can help companies answer questions such as:

* What are the accepted work practices that are getting in the way of top-performing women?
* What does the company’s experience reveal about the way high-potential women ascend to leadership positions? And why don’t they?
* Are you tracking whether women are groomed for and are getting the right “stretch” assignments?
* How do you select people for high-visibility projects?
* What attributes and experiences make a person promotable to the top ranks?

Why do Women Directors Matter? Where are the women? And does women's absence in boardrooms affect the bottom line? A study by Leeds University Business School suggests that women can make the difference between success and bankruptcy. Having at least one female director on the board appears to cut a company's chances of going bust by about 20 per cent, according to Nick Wilson, Professor of Credit Management at LUBS, who looked at all 17,000 companies that were wound up in 2008. Therefore, the importance of improving the gender balance of corporate boards is increasingly recognized across the world. This is not just a gender numbers game. It is about the richness of the board as a whole, the combined contribution of a group of people with different skills and perspectives to offer, different experiences, backgrounds and life styles and who together are more able to consider issues in a rounded, holistic way and offer an attention to detail not seen on all male boards which often think the same way, and sometimes make poor decisions.

Arguments for achieving change, however, have nothing to do with being nice to women—they’re about ensuring sustainable economic growth and long-term business success. Of course a key factor driving boards is profitability and return to shareholders. A range of research illustrates the positive impact that women’s contribution to the boardroom can make to the bottom line of the company’s finances, and positively associates gender-diverse boards with improved performance.


Gender diversity also fosters innovation and the most innovative teams are those with a 50/50 gender balance. Studies have found that “innovation-intensive” firms financially outperform others if they have women in senior management. They provide evidence of a collaborative female management style at the senior level that encourages creativity. Today, more than ever before, competitive market forces are asking for innovation as an output as much as a managed process – imagine the consequences of the board of Cisco or P&G or Tata Sons not understanding the concept of innovation in an existential sense! In the future, innovation will dominate board room conversations from another critical angle: risk taking. So, an intelligent board would mean an innovation centric board for sure. Gender-diversity should not mean getting women to adopt—and adapt to—“male” patterns of behavior so that they can perform better in a male-dominated world. It’s no wonder that many women who have achieved senior roles say they feel worn out by not being able to be themselves in such situations.

Boards are often criticised for having similar board members, with similar backgrounds, education and networks. Such homogeneity among directors is more likely to produce ‘group-think’. Women bring different perspectives and voices to the table, to the debate and to the decisions. Studies have shown that three women are required to change boardroom dynamics, allowing them to become more vocal and their voices to be heard. The correlation between strong business performance and women’s participation in management is striking. Studies have shown that where governance is weak, female directors exercise strong oversight, can have a “positive, value-relevant impact” on the company, and that a gender-balanced board is more likely to pay attention to managing and controlling risk.

There are three established theories as to why women make difference. “The first is that having men and women on the board gives you a balance of complementary skills, making for a better-run company. There is some evidence that women take on a bit less debt and are better at managing cash flow. They may also be stronger at people-management: a lot of HR directors are women. “The second theory comes down to behavioural science: men and women behave differently. Women tend to take a less excessive approach to risk, and that may explain the lower insolvency rate. “Third, it has been suggested that because women generally have to work harder to make it to the boardroom, the ones that do make it are exceptionally effective.”


It's a massive generalisation but men tend to struggle on in silence, pretending that everything is fine. When things are going awry, it is crucial to accept that you can't do everything. Men have that egotistical arrogance that makes them think ‘only I can run this company'. It's the same problem you get with husbands and navigating - they won't ask for directions.

Women are more emotionally attached to their companies - and also that, while those companies may cope better with an anticipated squeeze, they may be more likely to go to the wall once creditors are at the door. Women are much more likely to get walked over when it comes to the point of insolvency and that’s when the tough guys get involved, and women make easier prey.

One recent survey even showed that women will ask more questions in the boardroom, that women are more courageous in the boardroom, perhaps because they don't know the CEOs as well so they don't play golf with them. "It's not women as much as having diverse points of view ... instead of group-think around the table."

HR: The Catalyst for Change


The role of HR is becoming more strategic than in the past and the importance of HR has increased focusing on the ever changing needs of the organization. But the question is whether the skill set and the type of people in HR are actually aligned to that as yet. We can no longer rely on the luxury of our organizations complying with our outdated rigid long term people strategies. Successful organizations are becoming more adaptive, resilient, quick to change direction and customer-centered. We need to gauge if HR department is doing enough to encourage women to climb up the top ranks and thus paving a path to the boardroom?

In order to encourage more women onto boards, HR should educate the female staff on the role of the board because sometimes it’s seen as a scary role and people often think that they are not good enough to be on the board. HR can facilitate the link between the board and all senior staff looking at the mechanisms and aspirational enablers that will help women make it onto boards. “That’s ensuring that the hiring policy does facilitate women coming into the workplace, and ensuring a pathway [for them].

While it would be easy to view this issue as a “women’s problem,” but for sure it’s a leadership problem. Companies need a breadth of exceptional leadership throughout the organization, and if they fail to tap the full potential of their women executives, they’re missing a critical piece. Recognizing that, there’s an indisputable opportunity for HR Director to frame the issue of retaining and advancing high-potential women as a strategic imperative that makes good business sense. HR directors are the custodians of driving the important change, of bringing more women into leadership positions in organizations. HR directors often need to be mentored into nurturing the company culture and their own mindsets to think “differently” when hiring or reassigning executives into key positions.

Despite the best intentions of HR directors – and diversity programs/ debates in corporate circles – they still seem to be hiring people “just like themselves” to fit into clearly defined personality-types that will surely regress innovation and creativity that are the “heart” of fast-growing and sustained best performing companies. There is an urgent need, therefore, for re-training the HR directors in Indian companies to bring in greater creativity and innovation in hiring un-tapped sources of women executive talent, and nurturing mindsets into moving away from stereotyped traditional definitions for key positions, in the interest of growing the company.

Companies need to openly reflect in a very positive sense, if there is indeed a “novelty-aversion” in the hiring process and for stepping outside their “comfort-zones” to respond to what may be in their companies’ best interest for talent and leadership. Companies will need to make a transparent assessment to see if the HR director has a real understanding and passion to find the best talent, irrespective of how different it maybe from their own set formats of company HR image and policies.

Contributing Writer: Natashaa Kaul from Ahmedabad. I am a student of " Doctoral Programme in Management" at Nirma University, Ahmedabad [email protected]

Note: The opinions expressed in this article are that of the writer. is not responsible for the independent views of the writer.

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