On November 17, 2016, in cities around the country, leaders participated in a “National Conversation on Board Diversity.” This annual event, led by 2020 Women on Boards, is running a national campaign to increase the percentage of women on U.S. company boards to 20% or greater by 2020.
It’s a lofty goal, as only 16% of S&P 1500 board seats were held by women in 2014—up only 5 percentage points in 10 years, according to Ernst & Young research. This is despite efforts to advance board diversity by institutional investors and other groups. And despite the fact that women hold half of all management positions, are responsible for nearly 80% of all consumer spending and account for 10 million majority-owned, privately-held firms in the U.S. (primarily small businesses). This is despite research by Catalyst, MSCI Inc. and other organizations that links improved business performance to greater female representation in the board room, and despite the message a diverse board sends stakeholders about valuing diverse perspectives.
What companies can do
Companies are encouraged to take a number of steps to strengthen board diversity long-term. These include identifying C-suite sponsors for female leaders to prepare them for board roles and expand their network; sending high-potential women to board development programs; setting voluntary goals to increase board diversity and setting term limits to open board seats more often.
Companies play a clear role in building boards that represent the diversity of their workforce and customer base.
Women have a role, too. There are numerous women who serve(d) on one or more boards, in multiple industries. Their success stories, including some specific examples, contain consistent themes from which women can learn.
What women can do
• Start early. It’s never too early to start thinking about board roles and seeking experience to obtain them. Boards are primarily comprised of sitting or former CEOs and CFOs, so executives in finance or in a high-potential general management track would be well positioned for this role. Develop deep expertise and experience in a core competency, such as technology, operations, risk management or human resources. And seek other diverse experiences to maximize your value to potential boards.
For example, Nancy Gioia, a director on multiple boards including Brady Corporation and Exelon, worked for Ford Motor Company for more than 30 years. She has deep experience in global connectivity, electrification and user experience, but worked in quality, total vehicle program leadership, manufacturing and strategic planning, leading cross-functional teams throughout her career. She also started serving on boards while she worked at Ford to gain more experience, learn board governance and build her network. The depth and breadth of business knowledge she acquired made her stand out among other board candidates and has allowed her to make a greater contribution to the companies she serves.
“Start early and be strategic,” Gioia said. “Do your best in every role, say yes to new experiences, build advocates inside and outside your company and be clear on what you bring to the [board] table.”
• Build financial acumen. As a CEO, your experience with financial oversight will be an asset, as every member of a board must be able to read balance sheets and income statements and understand basic budgets and cash flow. If you are grooming executives for a future CEO position, it will critical to ensure they are getting this experience.
It’s key to the ability to prepare for board discussions and contribute in meetings,She serves on the boards of Work Truck Solutions and BriteHub and teaches Engineering Masters and MBA classes at Wayne State University, building on her previous senior leadership positions at General Motors.
“Financial acumen is a foundation for board work—you have to speak their language,” notes Nancy Philippart, general partner and co-founder of Belle Michigan, an early stage investment fund. “Understanding an organization’s financial performance helps shape questions about other aspects of their business, such as where and how an organization can allocate resources and where they might need help.”
• Define your value proposition and target industries. As you look to expand your responsibilities to outside boards, ask yourself, why would a company consider you for its board? What experience, expertise and abilities do you bring that distinguish you from other CEOs? That’s what you need to define, and translate to a board bio and resume. There are classes and resources to help. Professional women’s organizations such as Michigan’s Inforum Board Access provide tools to assess board-ready skills, strengths and interests. Firms such as SpencerStewart, RSR Partners and others provide guidance for leaders seeking board positions as they conduct board searches. Also, university courses such as Northwestern University’s Women’s Director Development Program and Harvard’s Women on Boards Program may be options. There are books that can help as well, such as “Into the Boardroom: How to Get Your First Seat on a Corporate Board” by D.K. Light and K.S. Pushor.
But it’s not just about determining how you add value—it’s defining where. Targeting industries where you have experience and passion is key. If you’ve worked for a major automaker, engineering, manufacturing or technology firms may be a good option. If you’ve worked for pharmaceutical companies or served on human health nonprofit boards, healthcare organizations are a likely candidate. Doing your homework to understand the board landscape in that industry is an important step in your strategy.
Diana Tremblay is vice president, Global Business Services for General Motors. Her career includes key leadership positions in global manufacturing and labor relations and positions or leadership roles on the boards of Itron, Inc., Kettering University, Inforum and Focus Hope, a Detroit-based nonprofit. Tremblay shaped her board value proposition through honest assessment of her experience and expertise, discussions with mentors and colleagues, Northwestern’s board development program, Inforum resources and by working with a board search firm.
“Be deliberate about defining your value proposition and determining industries and organizations that would benefit from your skills and capabilities,” Tremblay said. “What you bring to the table has to fit the needs of the board.”
• Get board experience. Boards advise organizations—they don’t run them. That’s a critical difference, and one that can be learned through education, observation and serving on nonprofit or association boards. Attending programs such as those mentioned above, reading and talking with board directors is one step. Participating in events is another way to meet and learn from board members and understand board governance practices. In addition, seek leadership roles that allow you to present to your organization’s board or engage in their committees so you can observe how they operate. And earning a seat on the board of a nonprofit or professional association is a hands-on way to learn the role of a board director and observe them in action.
Katy Barclay was Chief Human Resources Officer for General Motors and The Kroger Company. She now serves on the boards of Five Below, American Family Insurance, The Christ Hospital Network and the Cincinnati Symphony Orchestra and is chairperson of the National Academy of Human Resources board of directors.
Barclay said she learned a lot about boards by working closely with them at various stages in her career. “I saw what was effective, what wasn’t effective and went to school on that,” she explained. “You’re no longer actively leading the company. You put on a different hat. It’s the art of asking the right questions, sensing where you need to dig deeper, and sensing where you don’t.”
• Network and build advocates. Studies have proven that board seats stem primarily from networking, building relationships and letting people know you are interested in board work. Start with peer leaders and mentors who know your work and will actively advocate on your behalf. Keep in touch with them, providing up-to-date examples of your contributions. Ask them to introduce you to people in the industries you’ve identified as a good match for your value proposition, and to help you determine if a board’s culture and environment would allow you to contribute.
As you broaden your network, remember relationships are reciprocal. Ask for guidance and opportunities to expand your experience or grow your expertise, but also share relevant information, trends and contacts that may help them.
Building a base of advocates is critical—boards do due diligence when conducting a search, contacting references to confirm candidates’ qualifications and fit for their particular culture. Gioia said the right reference list can be a game changer—but you have to earn your advocates by delivering results, demonstrating integrity, staying current and becoming a go-to resource every step of your career.
“Creating a track record of leadership and sustained performance, doing what’s right for the enterprise and building relationships in every circle—your organization, suppliers, associations, government and community groups—is key,” Gioia said.
Earning a seat at the board table is not easy, but is well worth the effort. They’re making a strategic contribution to multiple organizations and paving the way for other women to be considered for board roles.
That’s a tangible step to achieve the 20 by 2020 goal.