Resources – AESC Articles
Source: The Singapore Business Times
In a rare example of global synergy, initiatives to encourage a larger percentage of women to serve on boards of directors are springing up around the world. Fuelled in part by government interest and, in some cases, by government intervention, this worldwide phenomenon is gaining momentum and has become a major focus for media attention. In other words, the time for this issue has come.
Although the level of female representation on boards differs from country to country – some countries, such as Norway and Sweden being in the 30-40 percent range, and others, such as the UK and United States lagging behind in the 10-20 percent range – the cause of promoting more women on boards has become almost universal.
In Singapore, organizations such as BoardAgender are focusing attention on the male to female disparities on boards while the recently revised Code of Corporate Governance specifically requires boards to comprise directors with a diversity of skills, experience, gender and knowledge.
The government of Singapore has lent its weight to the issue via recent comments from Halimah Yacob, Minister of State for the Ministry of Community Development, Youth and Sports, as have corporate leaders from multinationals such as Citi and Microsoft.
The logic of the issue is indisputable. Women constitute half the population, half the consumers and half the university graduates. As Michael Zink, Citi head of Asean and Singapore, said in a recent Business Times article: “Gender diversity is in our self interest to make sure that our leadership team looks like the marketplace and society we serve.”
With the world facing a global talent shortage fuelled by demographic shifts, the encouragement of women to stay and prosper in the workforce becomes an imperative.
Part of the challenge is around supply – the corporate pipeline. Fewer women than men are coming through to the top level of organizations for a variety of reasons as described by McKinsey in their 2007 report.
These include the early exit of women from top management ambition because of the “double burden” of career and family obligations, the male corporate model still prevalent in many corporations and the legacy prejudices of the “glass ceiling”. But part of the challenge is also around demand, that is, that there are plenty of women more than capable of serving on boards who are not currently being sought out an “demanded” by boards.
The challenges clearly need to be addressed from a number of angles. Chairmen and chief executives of public companies around the world need to take action so that board positions can beopened to more female candidates, investors need to demand it and there needs to be more training and development of women at universities and business schools to assume Board roles during their management careers.
How can executive search firms play a constructive role towards these obvious goals?
Many firms already pursue candidate diversity as an end in itself and have done so for many years. Some even specialize in providing diversity candidates. However, there is still an opportunity for executive search firms to take a more proactive role in promoting greated gender diversity.
In the UK, the Davies report recommended that the executive search community should be encouraged to draw up a voluntary code of conduct in order to commit to search out and present at least 30 percent of a long list of candidates as women. Such a code was agreed and signed twelve months ago and highlights a number of areas where executive search firms can make a difference:
Succession planning: Search firms should support chairmen and their nomination committees in developing medium-term succession plans that identify the balance of experience and skills that they will need to recruit for over the next two to three years to maximize board effectiveness. This time frame will allow a broader view to be established by looking at the whole board, not individual hires; this should facilitate increased flexibility in candidate specifications.
Diversity goals: When taking a specific brief, search firms should look at overall board composition and, in the context of the board’s agreed aspirational goals on gender balance and diversity more broadly, explore with the chairman if recruiting women directors is a priority on this occasion.
Defining briefs: In defining briefs, search firms should work to ensure that significant weight is given to relevant skills and intrinsic personal qualities and not just proven career experience, in order to extend the pool of candidates beyond those with existing board roles or conventional corporate careers.
Long lists: When presenting their long lists, search firms should ensure that at least 30 percent of the candidates are women – and, if not, should explicitly justify to the client why they are convinced that there are no other qualified female options, through demonstrating the scope and rigour of their research.
Supporting selection: During the selection process, search firms should provide apporpriate support, in particular to firt-time candidates, to prepare them for interviews and guide them through the process.
Emphasizing intrinsics: As clients evaluate candidates, search firms should ensure that they continue to provide appropriate weight to intrinsics, supported by thorough referencing, rather than over-valuing certain kinds of experience.
Induction: Search firms should provide advice to clients on best practices in induction and “onboarding” processes to help new board directors settle quickly into their roles.
The just published Cranfield Business School study: Gender Diversity on Boards: The Appointment Process and Role of Executive Search firms has examined the performance of search firms since the Voluntary Code was established and has concluded that search firms are encouraging chairmen and nominating committees to broaden their remits when filling non-executive roles but that still more needs to be done to keep women in the runing for board room positions. In particular, more focus needs to be placed upon promoting diversity all the way through the recruitment process rather than just at the early stages of search. As the final short-lists are drawn up, more emphasis is still being placed upon baord room “fit” than upon the candidates’ abilities, thereby propagating prevailing male cultures and attitudes.
It is clear that no one initiative will correct the gender imbalance on boards of directors. What is clear, however, is that by pulling together, government, educational institutions, corporate chairmen and CEOs, and the executive search community can achieve much faster resolution of an important disparity that is harming national, international and corporate competitiveness.