Toward the end of the year, the Wall Street Journal’s Joann Lublin reported on an analysis conducted for the Journal by Equilar, which looked at women’s representation on the boards of directors at the 1,500 largest US public companies tracked in the Russell 3000 index and found that 76 of these firms had not had a single female director in the past ten years. The companies with a persistent lack of women’s representation were mostly smaller and concentrated in particularly male-dominated industries, but the study’s timeframe illustrates an important point about how the gender imbalance in corporate leadership perpetuates itself.
We know that having women on the board and in other leadership roles can confer numerous benefits on a business, as women bring skills and perspectives to the table that all-male leadership teams may lack. Unfortunately, men who sit on boards often don’t see it that way, and since directors are hired by other directors from their (mostly male) networks, the myth persists that there is a dearth of women with the qualifications to take on a director’s role. The qualified women are out there, but the men doing the hiring don’t know them.
Research has shown that companies with women on their boards are more likely to also have women in executive leadership roles. A study in India by the ET Intelligence Group last year found that companies with women CEOs were substantially more likely to have women directors as well. That correlation goes both ways, as the Atlantic’s Alana Semuels observed in a piece published late last month on the effects of women in corporate leadership:
The higher the share of women on corporate boards one year, the more likely the company was to hire women executives in the following year, the study’s authors, David Matsa, a professor at the Kellogg School of Management at Northwestern, and Amalia R Miller, an economics professor at the University of Virginia, discovered. This may be because women know each other through professional networks, and when there are women at the top—say on a corporate board—they help refer women to positions that otherwise might have been filled by men, Matsa told me. The increase also could have been because women discriminate less against each other, and hire them for executive positions, he said.
This same dynamic has been identified again and again. One report on 21,000 firms from 91 countries by the Peterson Institute for International Economics concluded that having women on the board increases the ranks of women executives. (It also found that companies with women on the boards tend to be more profitable than those with just men.)
At the White House’s Briefing on Corporate Diversity back in April we heard executive recruiters talk about how to help close the gender gap on boards of directors. One of the ways is to reconsider your criteria: If you want someone who’s been a Fortune 500 CEO, since 4.6 percent of them are women, you’re pretty much saying you want a man in the director role.
One head of diversity and inclusion also commented on this challenge during a panel discussion at CEB’s ReimagineHR event in Miami last September. Her advice? Put the woman candidate first. “If your board and senior team gets attached to an individual up front, you’re not going to be able to do better,” she said. “Start with women, minorities, or other candidates that are different from the group you’re working with and watch them win.”