Do women need more help getting into the boardroom?
The practice of sound corporate governance requires the development of a culture of inclusion and transparency that is inculcated by the chairman and the chief executive officer.
Sound diversity criteria include ethnicity, age, functional expertise and experience, but gender has been the glaring absence in most Caribbean company boards. Following are some interesting facts about women in the marketplace, and in business.
In 2012, 126 million women were starting or running new businesses in 67 economies; 98 million were running established businesses. Women own approximately 33 per cent of all businesses in the world, nearly half of which are in developing nations.
Boards with zero or only one woman represent 52 per cent of the Fortune 1 000 companies; and 16 per cent of those boards have no women. Women control nearly 75 per cent of consumer purchasing decisions, but 29 consumer product companies don’t have a woman on their boards. Beyond the Fortune 1 000, women directors are even sparser. The picture would have improved a bit since then, due to shareholder activist pressures.
Europe leads in gender diversity on boards. Norway met a 40 per cent quota in 2008; Spain and France have quota legislation in process; the 2011 Davies Report Women on Boards recommends that FTSE 100 comanies should aim for at least 25 per cent females on boards by 2015; and the European parliament wants a European Union-wide quota of 40 per cent by 2020.
Among the Trinidad and Tobago Stock Exchange listed companies, women non-executive directors (NEDs) number 32, or 13 per cent of the 250 directors; and 64 per cent of the companies have zero or one female NED. Our two largest conglomerates currently have no female NEDs. I do not support board quotas in the Caribbean, which I think would be counterproductive. However, a cultural shift that recognises “women on boards are good for business” would contribute greatly to our socioeconomic development.
When the question of gender diversity is raised in filling board vacancies, the frequent response is to scan existing boards and claim that experienced women can’t be found. However, a well structured nomination and appointment process that starts with identifying the board’s skills/experience gaps, then a genuine search for suitable, high-potential women could bring surprising results.
Those who deny the existence of suitably qualified women to fill board vacancies, in an environment where women represent the distinct and growing majority of graduates (including those from business schools), do so at the detriment of their companies and shareholders. My board experience with women directors has been nothing but positive. These women board directors are powerful professionals, prepared for meetings, and are actively engaged in well informed discussions; and that results in better decisions.
Women also bring to our boards several critical sensitivities that men generally lack, including seeking the conciliatory window, without being weak. In the end, we are left with this question: Why should we in the Caribbean not include qualified women on our boards, when they have such great influence on customers’ purchasing decisions and add exceptional value to boards?