The growing number of women taking a seat in the corporate boardroom has prompted an increased interest in how these directors approach board service versus their male peers. In the wake of the financial crisis, with widespread discussion about board accountability, it is especially important to ask how male and female directors diverge in their approach to the boardroom. How do both genders feel trust in boards can be restored? How do men and women differ – and agree – when rating their boards’ effectiveness in handling fundamental board responsibilities? Do either men or women directors believe that quotas are necessary for creating a more diverse boardroom?
Heidrick & Struggles and WomenCorporateDirectors (WCD), in conjunction with Dr. Boris Groysberg of Harvard Business School, surveyed men and women corporate directors and found striking differences, as well as predictable similarities, in how the 398 respondents think about these and other critical issues facing boards today.
In the survey, three primary trends emerged in the areas of:
Rebuilding trust post-meltdown
As board members across the US and around the world grapple with the issue of rebuilding shareholder, employee, and consumer trust, women and men directors varied dramatically as to how this should be done.
Women demonstrated a greater belief than their male peers that more oversight and increased diversity would help to restore trust in boards. However, both men and women agreed that requiring an independent chairman – a development many see as inevitable – would also be effective.
Assessment of board performance
Women directors were, generally, more critical of board performance, especially in the areas of setting appropriate executive compensation levels and in their own performance assessment process. But at least half of both men and women directors gave less than stellar marks to their boards with regard to succession planning and advancing diversity on the board and in the company.
There is clearly, in their minds, more work that needs to be done in these areas.
Diversity and quotas
The questions about boardroom diversity elicited strong responses from directors, with women clearly believing that diverse boards are more effective boards. Most directors, however – women and men – do not support the still-controversial concept of quotas. Ninety percent of female directors, and just over half of male directors, believe that women bring unique attributes to the boardroom. Likewise, the majority of women (62%), versus only 43% of men, supported the new SEC rule that nominating committees should explain in proxies the role that diversity plays in new board member selection.
The gender divide in the boardroom provides insight into the very different dynamics at work as women increase their presence in corporate leadership ranks. With some of the most widespread regulatory changes in a decade now a reality, companies are gradually awakening to a new set of expectations about the role of boards and the transparency of their policies. Moreover, the financial crisis has shifted new responsibility to boards for greater oversight – creating a need for a more “self aware” board that can take a harder inward look at its own performance.
Overall, the survey reveals that women directors appear to be more assertive on a number of hot-button issues, including evaluating their own board’s performance and supporting more oversight on boards. This changing dynamic will likely usher in a new era of governance and perhaps more significant changes for US companies and their boards over the next several years.
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