I won’t refer to DIVERSITY because this post is only about a gender issue and not about real diversity on Boards. Is gender quotas the solution or the beginning of future inequalities. Such quotas will drive Boards to recruit women as directors ‘just’ to fulfill one requirement, whilst overlooking the need for an appropriate board member. It should be about representing wider society. Therefore, we need to recognize whether the corporate system is able to produce adequate talent (men or women) to qualify for Board positions.
The percentage of women on boards of S&P 1500 companies barely budged from 12.1 percent in 2009 to 12.6 percent in 2012, according to a survey released in March by GMI Ratings, a corporate governance adviser to big investors. The United States is 11th among industrialized nations, trailing countries such as Norway (36 percent), Sweden (26 percent) and France (17 percent), GMI found. Whereas in the middle-east this number could be close to zero.
Board members tend to consider their friends, who are often male, when openings occur. It’s not a different story where women hold the reins. The 15 S&P 500 companies led by female CEOs last year had about 33 percent women directors, compared with the 16 percent average for companies in the group led by male CEOs.
One of the ways to make the Board positions more diverse is to increase the number of rotations,so that the Board seats change hands more often and provides opportunities for others with more talent including women to vie for these seats. In SriLanka most of the board positions on Banks changed hands in 2012 due to Governance rules introduced by the Central Bank. This did make way to a small number of women to get these seats, compared to an all male club. Another measure would be to support mandates such as the gender quotas and corporate governance codes that consider wider representation.
The better reason to consider women on Boards is because they have different strengths. Katharine Cook Briggs and her daughter, Isabel Briggs Myers during World War II, believing that a knowledge of personality preferences would help women who were entering the industrial workforce for the first time to identify the sort of war-time jobs where they would be “most comfortable and effective” created the MBTI type indicator. Therefore, in the current context there are other personality traits of women which would add value to the functions of a Board of Directors, as they did during the war-time.