Women on Board: Directors Must Move to Tap Advantages

That’s the conclusion of research by Crown World Mobility, a division of Hong Kong-based Crown Worldwide Group that consults with companies on talent issues. Despite the fact that women and minorities outnumber white males by two to one in the U.S. workplace, they continue to represent a disproportionate percentage when tallied into the executive and leadership roll call, the firm notes.

And one major reason is that most U.S. companies lack strategies for talent recruitment to harness the power and untapped potential of these groups. The responsibility for such an oversight can begin with the board, Lisa Johnson, global practice leader for the firm told Spotlight on Boards.

“For boards to be more committed to having women in senior leadership, it can’t just be something that HR comes up with,” she said. “It requires commitment from the senior levels of the organization.”

Making the case for more women in senior leadership—in both C-level positions as well as on the board itself—is becoming an easier argument to make, Johnson noted, because of a variety of recent empirical studies. For example, Credit Suisse found that companies with women directors outperformed companies without women directors in return on equity, average growth, and price-book value multiples. For six years in a row, a review of 2,360 global companies showed, those with at least one woman director had better share-price performance than those without women.

The reasons having women in senior leadership roles makes a difference include their better skills at listening and expressing empathy, but go way beyond that, Johnson said.

But, she cautioned, in attempting to heed this emerging truth, directors should be careful not to act too opportunistically. The benefits of women in senior leadership come not just from the fact that they’re female but from who, in particular, these women are.

“They must be otherwise qualified to be on a board, of course,” Johnson said. “But within that pool, having women on a board brings those beneficial influences to bear.”