As per a Deloitte report, with the current growth rate of the percentage of board seats held by women, it could take us thirty years to achieve any gender parity.
Diversity and Inclusion have been on the radar for sustainable growth; however, we still need to really action and walk the talk of bringing honest diversity to the boardroom. Indeed, no one can deny the diversity that Women bring to the Boardroom.
Why should women be in leadership positions of growing organizations? And why should they be on the board of the organizations that are seeking to grow? Well, the answer lies in looking at the organizations that have a culture for growth and inclusive diversity built in their DNA. The average number of corporate board seats held by women on the 2018 Russell 3000 Index (R3000) has risen from 17.7% to 20.4% in 2020.
There are more and more women added to the board positions annually. However, the rate of addition is not enough. According to the sixth edition of Deloitte Global’s Women in the Boardroom Report, the percentage of board seats held by women has only grown 1.9% globally. If this were to continue it could possibly take us thirty years to achieve any gender parity.
Need For More Women In The Boardroom
What is the consensus though about these positions held by some very dynamic women? Why do we need more women in the boardroom?
A very important thing to note is that the Board must reflect the changing customer base and generational impacts in the organization. For example, if an organization may be selling all men’s products, but the influencers of the purchasing decision happen to the women in the house, then a Boardroom diversity reflecting customer behaviour will be valuable. Likewise, if a company is in the business of selling cosmetics and does not have any meaningful female representation on the Board, it will sooner or later miss out on critical visionary insights.
So, what do we need to make the organizational environment conducive for women to thrive and help the company grow? I think the two pillars for this are:
- Managing and changing the existing perception: Negative bias exists in all shapes and forms and we need to create positive narratives to balance and tilt the conversation in favour of women. For doing so, we have to make the cultural shift and start giving women in all positions, the power to make decisions in realms outside of HR and Finance – the two most popular women dominated services – and get more mainstream business.
- Creating new leadership pipeline: Too often, a woman leader is not selected for lack of pipeline. I once recall an MD of a leading consulting firm was wanting to fill an opening and had asked to see diverse candidates. However, he was not getting the diversity he was wanting. Finally, he told the search executive that he would only consider a female candidate for that role. Lo behold, he finally started seeing a variety of good and diverse resumes of accomplished women with relevant skills and eventually hired a candidate of his choice.
Having more diversity will mean an increase in creativity across products, services, and processes. Men and women think differently and will see things the other won’t.
How can companies benefit from the diversity?
- Emotional Quotient – There is enough research to prove that EQ is a deciding factor when it comes to making or breaking an acquisition or merger deals across the world.
- Thinking styles – A diverse team thinks from a different perspective and adds value to the process of decision making, which otherwise is a lopsided affair and has an inbuilt error in the discretion.
- Solution seeking – Diverse team have more capacity to think 360 degrees and hence have higher chances of creating win-win solutions.
Finally, for change to cascade in a positive direction; company leaders need to take ownership of gender diversity, not only by appointing more women to boards but also increase the pipeline of women on boards, organizations across must create pathways for senior women leaders.
Educating managers and executives on the impact of stereotyping and giving them the tools to break down unconscious behaviours are also integral to real change. India Inc has a great pool of senior women leaders and must bring in fresh perspectives into their Boardrooms and look beyond bringing in the family ‘heir’ looms.
(Lakshmi Potluri is a business transformation strategist. The author has had an illustrious career being the present CEO, DCF Ventures; Cofounder, Jabong, Ex-Goldman Sachs and Columbia Business School alumni.)