Leadership in the 21st century requires more of the attributes traditionally held by women. This is the conclusion reached by researchers John Gerzema and Micheal D’Antonio in their recent book, The Athena Doctrine. The team interviewed 64,000 people in 13 countries, men and women alike. The results were undeniable: the female traits of collaboration, flexibility and nurturing are winning out in a world that is becoming increasingly more social, interdependent and transparent.
So what does this have to do with women in the corporate board room? Plenty as it turns out. Women are bringing diverse experiences, perspectives and communications skills to the boardroom. Most importantly, their presence is clearly documented in the performance results of companies with three or more women on their boards. In the wide ranging study conducted by Catalyst, a leading global research foundation, the positive results for business are clear. In the US, Fortune 500 businesses with three or more women on their boards have 53% higher return on equity, 42% higher return on sales and 66% higher return on invested capital than those that don’t.
It is rather inexplicable then why only 17% of the Fortune 500 board sets are held by women at the end of 2012. What is holding up progress? Other countries have taken a pro-active initiative to ignite the change in their board rooms. This change was set off by Norway in 2003, when the government declared that 40% of public board seats should be filled by women by 2007.
Many countries took note of this controversial quota; at the very least it got people thinking and engaging in dialogue that has led to some pretty remarkable results. In the United Kingdom, The Lord Davies Commission in 2011 set a goal of requiring FTSE 100 companies to have at least 25% of their board seats filled by women by 2015. The commission also set out changes in financial reporting that required companies to report their policy on board diversification and what they were doing to achieve it.
Seven British CEOs established The 30% Club and took it upon themselves to champion boardroom diversity while stepping up the pace. They set their goal that women should occupy 30% of the FTSE board seats by 2015. Their private industry efforts have yielded some very positive results. In 2010, women held 12.5 % of the FTSE 100 board seats, and in 2012, the number grew to 17.3%. What is even more impressive is that since March 2012, 55% of non-executive board appointees have been women.
Others are taking action too. Countries from Denmark to Indonesia, Brazil to Jordan, and Australia to Germany are taking action to diversify their boards. Some of these actions are quotas, but most are voluntary or regulatory, requiring listed companies to state their policy publicly, and explain what they are doing to implement it. This process seems to have the biggest impact so far.
A case in point is Australia, where women’s representation on boards grew from 14.2% in 2010 to 24% in 2012. This progress came as the result of amended corporate governance codes that now impose strict disclosure requirements for listed companies. Private industry support has also contributed to these impressive gains.
So back to why all this matters. It is because there is significant focus on the importance of diversified boards on a global basis. The business case in company performance is abundantly clear. Also contributing is the number of women in the corporate pipeline who are proving to be very skilled business executives.
Those attributes surveyed for The Athena Doctrine are clearly noted; collaboration, flexibility, transparency and social skills are the things people look for in 21st century leaders. Importantly, the conclusion of book was not whether men or women should be dominant in the new leadership, but that the combination of male and female attributes will yield the best results. And that is why boards should seek diversity in the boardroom. They want to achieve the best possible results. It’s just good business.
Read the World Economic Forum’s Global Gender Gap 2013 report.
Author: Kay Koplovitz was the first woman to head a television network when she founded USA Network. She serves on the board of several companies and was formerly chair of the US National Women’s Business Council.
Image: Brokers on the floor of the London Metal Exchange in London. REUTERS/Russell Boyce