What's the Big Idea?
If more women were on corporate boards four years ago would we have seen the kind of catastrophic financial and economic meltdown that occurred in 2008?
Would the presence of female corporate directors have mitigated the damage?
Recent studies have suggested that it's not just a nice PC thing for a company to have mixed boards, it's a necessity, since companies with mixed boards simply perform better. So what's the holdup?
There are a number of significant challenges involved in placing the right talent on boards, and to that end, over 225 of the most powerful corporate businesswomen in the world are meeting in New York City today and tomorrow to discuss how to overcome these obstacles.
The organization hosting the event is called WomenCorporateDirectors (WCD). In the last year, WCD’s membership has jumped to more than 1,400 directors in 42 chapters worldwide – up 40% from this time last year, with new chapters in Indonesia and Nigeria in the past month alone.
While women currently only make up 14 percent of the directors at the largest companies in the U.S., and about 16 percent of the largest companies in Europe, the idea of creating mixed boards is gaining significant traction, due to several key trends, according Davia Temin, President and CEO of Temin and Company:
- The worldwide recession has opened people up to doing things differently. Companies are "looking for progressive change, but not disruptive change,” Temin says. Bringing women onto boards represents progressive change.
- There is also a business case supporting the inclusion of more women on boards. A McKinsey study found that companies with mixed boards had 56 percent higher operating profits.
- A lot of Nordic countries that have adopted quotas have been actively lobbying in the U.S. Also, shareholder activists are also becoming more vocal and playing a greater role. (Just this past week a rally was held at Facebook’s New York City office.)
- Lots of different organizations around the world are advocating for change, and the aggregate of their voices is starting to be heard. The volume has also been raised by social media.
What's the Significance?
According to Temin, the challenge of placing more women on boards varies widely from country to country. For instance, while the EU average is 11 percent, Norway is the highest, at 32 percent. While countries like the U.S. are unlikely to adopt the kind of quotas that have been used in Scandinavian countries, according to Susan Stautberg, President of PartnerCom Corporation and WCD co-founder, "if each Fortune 500 company even added one woman to the board it would make a big difference."
According to Davia Temin, the time for change is right now, as momentum is on her group's side, and "the amount of attention this year is rather unprecedented," she says. How can the WCD take this momentum and translate it into meaningful change? There are a number of different approaches that can be taken besides the introduction of Scandinavian-style quotas. Temin wrote in Directors & Boards in September, 2010, about the age old-dilemma of whether the carrot or the stick works best. "As for myself," she wrote, "forever caught between the two, I answer both."
Over the course of the next two days, a group of women at the invitation-only 2012 Global Institute will be discussing this question and others, and unveiling new solutions. Panelists and speakers will include global business leaders such as:
• Denise Morrison – CEO of Campbell’s Soup
• Deb Henretta – Procter & Gamble Group President, Asia
• Mary Wagner – Starbucks SVP of Global R&D/Quality
• Susan Schwab – Director of Caterpillar, Boeing, and FedEx
• Ann Korologos – Former U.S. Secretary of Labor; Director of AMR Corporation, Harman International Industries, Host Hotels & Resorts, Kellogg Company, and Vulcan Materials Company
• Fatima Al Jaber – President, Al Jaber Group (Abu Dhabi)
• Marise Ribeiro Barroso – President, Mexichem (Brazil)
• Romi Haan – Founder and CEO, Haan Corporation (Korea)
• Phuti Malabie – CEO, Shanduka Group (South Africa)
• Olunfunke Iyabo Osibodu – Group Managing Director and Chief Executive, Union Bank of Nigeria
• Sandi Peterson – CEO and Chair, Bayer CropScience; Director, Dun & Bradstreet
Big Think is happy to announce that we will be covering this Institute in depth. Please stay tuned for future coverage.