By Alesia Stradford
Women offer so much value, and it’s about time companies are beginning to realize it. We have witnessed the rise of women on boards of directors worldwide, whether due to legislative pressures or in companies’ own decisions to diversify their boards. The value women bring to the table can no longer be overlooked, and any company who fails to see this only hurts themselves. An article from Entrepreneur confidently states that women-led companies outdo male-led companies in performance and profits. Companies such as McKinsey and Credit Suisse have shown an increase in financial performance since adding women to their boards. Additionally, having a board that is both diverse in gender and race welcomes a range of perspectives that can support strategic decision-making. Fortune 500 companies such as Ulta, Viacom, CBS, and GM have more women than men on their boards!
Unfortunately, the rate of increase has slowed for three of the past four years. Let’s get into possible reasons why and solutions on how we can increase the number of women globally.
Reasons for the slowed growth
The global decline in all-men boards
According to MSCI data, from 2017-2018, the growth in women on boards slowed, increased in 2019, and slowed down again in 2020. One reason for this slow growth in 2020 was less women joining boardrooms and a 17% decline in all-men boards worldwide. Emerging markets deserve credit for this slow, yet steady growth. Belgium, France, Italy, Norway, Portugal are leading the growth toward gender parity, as 100% of their companies have 3 or more women on their boards!
The outbreak of Covid-19
The pandemic has disproportionately affected women in the workplace causing them to leave their jobs and posing a huge threat to the progress companies have made toward gender equity and diversity. Canada, for example, saw a dramatic drop in the number of women in the workplace, being the biggest decline they’ve seen in 30 years. This plunge has frightened Canadian companies, as they worry that it will reverse the progress they’ve made toward gender diversity and inclusion, and even impact the next wave of female leaders.
Given these reasons and the issue of many boards still lacking women, here are some solutions to help companies introduce more women on their boards:
1. Focus on eradicating male-dominated boards
Companies need to be intentional about shifting gender disparity on their boards. They can do this by:
- Setting monthly and yearly goals and objectives that drive action.
- Educating high level management on the power, influence, and value of women in leadership positions through training, resources, tools, and strong research.
- Evaluating the success of companies with women on their boards. Companies should take the time to consider companies who are outperforming them with women on the board, especially those in the same industry as them.
- Changing the standards used to measure the qualification of women. Many companies only consider women who’ve been CEOs as a potential board member, but given the imbalance of men in CEO positions in the past, this qualification is unfair. There are other women with skills, expertise, and talents worth considering, and if companies decide to consider them, they can increase their amount of potential candidates.
2. Consider the quality and quantity of women in the boardroom
Changing their idea on the amount of women they need to have on their board. While some companies have realized having women on their board is significant, they believe adding one is “good enough” to mitigate the issue. One woman on a board dominated by men is not only extremely insufficient but also detrimental, as the company ends up hurting itself when it misses out on reaping the benefits from the magnitude of women’s value when they work together.
3. Strengthen the company’s resilience to lessen the impact of crises
Finally, companies need to find a way to build resiliency during crises to preserve their progress in developing gender diverse boards. From the unexpected Covid-19 outbreak, many companies took a major hit due to lack of preparation. Now that our world has witnessed how unexpected events can negatively impact businesses and push women out of the workforce, company leaders and top management need to focus on devising strategies that will help to keep women on the board.
Projected data from MSCI reveal that it could take 18 to 49 years before gender parity is reached on corporate boards! With these solutions, we hope to expedite the progress across the globe.
Female representation in corporate boards is so important. We don’t want to keep taking steps forward, just to take even more steps back. The only way to preserve progress and further growth is by continually devising solutions to tackle every obstacle that gets in the way. Women who already hold positions on a board can help bring about change by uplifting other women to show they can do the same, shining light on other women whose value but also use their voice to encourage the company to select more women. Although the growth has been slow, we’re thankful for progress. Let’s continue providing solutions and advocating for women on boards across the globe so we can accelerate our progress!
What solutions would you give to help enhance the increase of women in boardrooms?
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