The Director: Why boards need more women

Moves last month to fast track more women on to public listed company boards are welcome, if long overdue. The evidence supporting more aggressive strategies to elect more women onto more boards is everywhere.
The so-called 25 percent Group launched on June 13 wants to more than double the number of women on listed boards from 10 to 25 percent.
The move, if successful, will be in stark contrast to the behaviour of Britain’s Conservative government which, despite pledges to the contrary by Prime Minister David Cameron, has dropped its proposed “golden skirt” policy whereby it would introduce quotas to increase the number of female directors on company boards.
Tory ministers decided to “stand up for business” rather than for ladies, and opted to strip out “burdensome business regulation” and that included any proposed regulations which might speed up the process by which more women might get their feet under the board table. The logic of having more female directors because it is better for business has, it seems, completely eluded Tory ministers.
Meanwhile the Italian government, even without what would surely have been enthusiastic support from former Prime Minister Silvio Berlusconi, has enacted legislation requiring all listed and state-owned Italian companies to have women comprise third of all board members by 2015. Only six percent of Italian directors are women compared with 14 percent in the European Union and 16 percent in the United States.
An increasing body of research conducted by growing portfolio of fairly august research organisations shows conclusively that having more women at the top, on boards and as senior executives, delivers better organisational performance.
Apart from the fact women represent at least 50 percent of the customers and other stakeholder communities in society and the marketplace, women directors apparently deal with risk more effectively. That’s pretty important in both management and strategic capabilities in today’s world.
They also focus better on long-term priorities than do competitive, self-focused and egocentric men.
Some recently released US research also shows strong link between the presence of women on boards and better corporate reputations. Because of that, and other factors, an increasing number of rating agencies and investment funds use the extent of gender diversity on board as an investment criteria.
Women are probably good for business and organisations of every kind. These sudden efforts to reverse New Zealand’s previous reluctance to turn more directorships over to women is encouraging even if, as one board chairwoman suggested, “the problem [of getting more women onto our biggest boards] is not about competency. It is about the reluctance of New Zealand boards to embrace diversity of thinking and perspective.”