Corporate leaders who have paved the way share their insights and strategies.
Corporate leaders spearheading gender parity in the boardroom can provide a window into how to achieve what many see as unachievable.
These companies are in a unique group of nearly 325 with 30% or more women on their boards, exceeding the national average of 23.4% board seats. This group also includes 91 companies with 40% or more women on their boards, as compiled by BoardEx.
We asked 35 CEOs who are leading the way on gender parity to share their stories — what motivated change, the journey, the rewards and the way forward. What we learned is that they have specific motivations, business motivators and personal convictions that drive them.
Here is an overview of what they told us:
Better Decision Making: Very few of the CEO game changers started with a “gender agenda” based on “helping” women. Instead, their motivation was a deep conviction that more diverse boards really do make better decisions and deliver better results, and that gender diversity is an important component. They saw the research and they saw it in action.
“I observed that data over a period of time reflected higher return on sales, return on equity, problem-solving, just a whole host of things,” says Rod Martin, CEO of Voya. “We had a fresh piece of paper. We were starting a brand new public company, I've often referred to it as a 6,000-person start-up company. The biggest statement one can make initially is with your board. What better time to do that then immediately?”
Reflect the Customer: The focus on gender intensified for those companies for whom women were the primary customer and a strong CEO belief that boards should reflect those customers. In fact, even companies in non-female sectors recognized the female influence factor as women impact over 85% of all purchasing decisions.
“Dressbarn's attitude was always about doing the right thing for the customer but the 2015 acquisition of Ann Inc. was a transforming moment for our board,” says David Jaffee, CEO of Ascena, who wanted the company's board to reflect its customer base when the company acquired Ann Inc. “At that point we had only one woman on the board. The acquisition allowed us to rethink what kind of board we needed to achieve and that was to have at least equal representation of women at the board level because they directly represent our customer.”
Message to Employees: CEOs driving change felt that gender balance in the boardroom was a critical motivator for employees and a signal of upward mobility to the growing number of women moving up the ranks. To be an employer of choice and attract the best and most diverse talent, companies know they must reflect those they want to recruit who will in turn reflect and attract customers.
“You will never understand your customers, your employee base, their challenges, unless you have a group of people around the table who reflect that,” says American Waterworks CEO Susan Story. “It's a business imperative to have leadership that reflects the people who are on your team, the people who are your customers and the people who are in your community. So, it seems so fundamental to me, I don't understand why people don't get that.” The company has reached gender parity on its board.
Disrupt or be Disrupted: CEOs accelerating change recognized that the forces disrupting almost every business require diverse talent including its board and refreshment at all levels invigorates, energizes and innovates. The downside of a board out of touch with rapidly changing business sectors outweighed the risk of stepping outside traditional networks to find talent suited to the business's changing needs.
“We had a very specific plan. It was not ‘Let's go look for particular candidates,' ” says Jack Remondi, CEO Navient. “It was, ‘Let's identify the skills we need and ensure that we are seeing a diverse slate of candidates who can help us on different experiences.' ”
“We were very deliberate and adopted a plan to make sure that we were refreshing the board periodically to have a mandatory retirement policy. In a perfect world, you would not have age or tenure targets as retirement targets. You would have an assessment process that was strong enough to make sure it created turnover and refreshment periodically.”
Making it Happen
Of course, accelerating any kind of change requires a successful merger of the “why” and the “how” — if the motivation to make it happen is there — the “how” to make it happen is easier to find. CEOs who lag behind are hiding behind the “how,” and really are lacking the powerful motivation for change.
Here's how corporate leaders we've talked to achieved gender board parity:
- Recognize it as a Business Issue: CEOs, board chairs, and nom/gov committee chairs view board composition as they view the business. When they are not getting traction, they develop a plan to correct it. They understand they have to reflect the constituents they serve — their employees, customers, communities, and shareholders — in that order. If they attract the most diverse innovative talent and treat them well, they will attract diverse customers who will be treated well, diverse communities and ultimately shareholders win. It's a win-win for all.
- Conduct Regular Board Assessments: Based on the strategic direction the companies need for the future, most CEOs choose regular reviews to ensure the board has growth relevant skills vs. term limits or mandatory retirement ages.
- Open the Aperture: The single most consistent finding among all CEO/board chairs was reaching beyond sitting CEOs which inherently limits the number of women in consideration. A board dominated by CEOs may not bring true diversity of thought or decision making or more importantly the specific new skills required in a changing marketplace and critically moving beyond sitting or recently retired CEOs does not equate to lowering standards. And don't make prior board experience a requirement.
- Involve Recruiters: Brief search firms on competencies and skills based on what businesses need for the future, but “demand” a diverse slate.
- Build Bench Strength: Establish a vision and timetable to evolve to a gender balanced board recognizing building a great board doesn't happen overnight. This may include increasing the number of board seats to accelerate gender balance.
- Create the Culture: Tell stories and celebrate success around gender diversity and inclusion. It doesn't just occur at the top of the house but permeates the organization.
- Women Win: Female directors need to get to know women within the organization and they need to tap their networks of outstanding women for board positions.
- CEO Sponsorship: Sponsor your women and tap into CEOs who have sponsored women. Talk to those who have done it — talk to a CEO whose board you admire.
- Getting It Done: Embrace leadership of gender balance as a CEO/board chair responsibility, and look to getting to gender parity by 2025.
Janice Ellig is CEO of Ellig Group, whose focus is Reimagining Search. With 20 years prior experience in corporate America, she is dedicated to increasing the placement of women and diverse candidates on corporate boards and C-suites by 2025. Carolyn Carter's career in advertising spanned 35 years culminating in her position as CEO of Grey Group for Europe, Middle East & Africa from 2000-2010.
The interviews included in this article are part of an ongoing “What Makes a Champion” initiative of the Breakfast of Corporate Champions, a biennial salute by the Women's Forum of New York to those S&P 500 and F1000 companies whose boards exceed the national average of board seats held by women.