Driving a Culture of Inclusion on the Board
Women lead 25% of major board committees
The Agenda article, “Driving a Culture of Inclusion on the Board,” was written by Russell Reynolds Associates Consultant Laura Mantoura on the value of diversity on boards. The article is excerpted below.
Public company boards have made notable progress in appointing female directors. Women now make up 26% of S&P 500 board members, up from 16% in 2010. As of last year, each of those boards includes at least one female director. While pressure from institutional investors and proxy advisors has been one catalyst, boards are increasingly recognizing the value of such diversity on its own merits.
Simply appointing women to boards is not enough, however. Getting full value from diversity means that incumbent board members must commit to building an inclusive culture, in which every voice is heard and has equal weight. Without inclusion, diversity falls short.
One sign that inclusion is lagging is the imbalance in board leadership. Independent board leaders – whether lead directors or chairs – play an increasingly important and visible role. Russell Reynolds Associates’ 2019 Global Board Behaviors survey of more than 750 directors showed that board leaders are more likely to focus on managing board culture than in the past, while they are also building closer relationships with executives and spending more time with external shareholders and media. However, women hold just 8% of these roles, suggesting men still set the tone at most companies.
What can companies do to improve gender diversity – and inclusion – at all levels of the board?
The most basic answer is to ensure that women are better represented in the roles that typically precede board leadership. Nearly 75% of current board leaders previously led one or more major board committee, either audit, compensation and/or nomination and governance, according to our recent analysis of S&P 500 boards. These positions offer crucial experience in leading fellow directors, as well as the opportunity to be seen as a leader by others.
Currently, about 25% of each of these three major committees are led by women. Though this is proportional to women’s overall representation on boards, it will be important to increase levels to grow the pool of board leader candidates. Encouraging more women to raise their hands for committee leadership positions is a key first step.
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