barriers to balancing the board: behaviours and cultural change

Research on barriers women face in achieving board positions and advancing to executive positions is plentiful. Extensive information on barriers can be found on the Opportunity Now web-site. This section explores key issues that consistently arise in research and conference discussions.

stereotyping holds women back
Stereotyping of women’s roles and abilities consistently arises in literature concerned with barriers to women’s advancement. Research by Catalyst in North America and Europe has found:

• Women are stereotyped as “taking care” and men are seen as “taking charge”. Taking charge skills stereotypically masculine behaviors-  are seen as those required for top level Board and executive positions which results in women not being actively considered for these roles.  
• Men are considered as “default leaders” and women as “atypical” leaders.

Gender stereotyping creates a double bind for women. If they portray more assertive behaviours typically considered masculine, they tend to be seen as competent but not personable or well liked. If they exhibit typically female behaviors, they are stereotyped as being too soft and not having the right leadership skills.

• Stereotyping results in certain career paths being seen as more appropriate for women. These tend to be corporate support roles, such as HR, which rarely lead in to the boardroom or executive suite.
  
• Stereotypes affect selection of non-executive directors. The Higgs review of corporate governance in the UK found that non-executives directors are typically white males, nearing retirement with PLC director experience. The report concludes that the supply of talent that does exist is not being sufficiently drawn upon and that areas in which women are strongly represented are ignored. These include human resources, change management  and customer care. 
  

women lack social capital
Although there are many women in the pipeline just below the executive level, they do not have the social capital – networks and mutually beneficial relationships - that many of their male peers have. Research in the UK by Opportunity Now and Catalyst identified a lack of access to informal networks as a key barrier to women’s advancement. Two thirds of senior women surveyed cited it as a barrier but men often don’t see it as only one third of male CEOs cited it as a barrier.

• Because the dominant power group in most organisations is male, informal networks are simply seen as business as usual even when they meet outside of office hours. Sporting activities as well as organised corporate hospitality often exclude women invitees.  Important networking among senior males also takes place at prestigious clubs that exclude women as members. This practice is mirrored by many golf clubs and service organisations or roundtables. Yet these networks and organisations are sources of company and business information and are important means of gaining access to powerful leaders, business contacts, allies and mentors.
• Research by Herminia Ibarra, INSEAD Professor of Organisational Behaviour, indicates networks are essential in important career transitions because “what you know is who you know.”  In a study on emerging leaders, she concluded that:
• The alternative of networking is to fail in either reaching for a leadership position or succeeding in it.
• Three interdependent forms of networking – personal,strategic and operational – are important in leadership transitions
• Networks facilitate strong working relationships, reaching out to contacts who can make referrals and leveraging inside-outside links.

top Leaders advocate but aren’t accountable 
Many leaders do recognise the importance of diversity but they aren’t usually accountable for results or for actions to ensure it is mainstreamed throughout the organisation.

• Chairmen and boards lack aspirational targets with timeframes against which to measure progress onboard diversification.
• Diversity targets are confused with quotas and assumed to result in a tickbox approach.  Yet no one applies the same logic  to achieving a market share for products as opposed to a market share of talent.
• Diversity metrics are not required in annual reports.
• Targets or scorecards that are used to measure results across a range of deliverables don’t usually include metrics on gender diversity nor influence performance appraisals and compensations of Chief Executive Officers or their direct reports.
  

talent management systems are biased 
Talent management, critical to developing executive directors, identifies high potential individuals and then supports and develops them to progress from one leadership level to another. However they are often unconsciously biased by the values and perceptions of leadership competencies held by male senior executives. This, in turn influences appraisals, promotions and selection for developmental assignments.  Thus new senior leaders mirror their traits and biases, resulting in fewer women being promoted into the executive suite.

• Development Dimensions International investigated talent development practices in 376 organisations worldwide and surveyed over 10,000 male and female leaders. They  concluded that women were not being utilized and developed to the same extent as their male counterparts:
• Men were found to make up progressively larger proportions of high potentials within each management level.
• AT executive level, 50% more men than women were in high potential programmes.
• Men were also twice as likely to be given multinational responsibilities which, in today’s global economy, can be critical to career advancement.
• In industries where leaders are mostly men, the majority of women fell off the management ladder before reaching executive status.
• In industries where the gender ratio was balanced at first-level management, one-third of women fell off the ladder before reaching executive status.
• IN industries where women were the majority of first-level managers, men were still the majority at the executive level.
• Regardless of the proportion of women in the leadership ranks, men are significantly more likely to be in high-potential programs.

board recruitment lacks transparency and rigour 
Non-executive directors are often recruited through an “old boy network” from among business and personal contacts of current board members The Higgs Review found that a high level of informality surrounded the appointment of nonexecutive directors:

• Almost half the directors surveyed for the Higgs review were recruited through personal friendships or contacts.
• Only four percent had a formal interview for the role
• Only 1% had obtained the role through answering an advertisement
• Plc Board experience was seen as the main and sometimes only competency demanded.

McKinsey & Co identified nine leadership behaviours as being important to addressing global challenges of the future. Women are seen to apply four of the top leadership behaviours more frequently than men while two of the leadership behaviours were gender neutral. Men applied only two of the nine behaviours more frequently than women and these scored as the bottom two on the list. Seventy percent of senior leaders saw a gap in their organisations of the most important behaviours needed for the future.

1.Intellectual stimulation 2. Inspiration 3. Participative decision making
4. Managing Expectations.  

Institutional investors are getting involved

• The California State (CalPERS), which has a US $195 billion investment portfolio, has written diversity guidelines into its Principles of Accountable Corporate Governance to encourage companies to take into account historically under-represented groups on the board, including women and minorities. CalPERS raises the issue of corporate board with underperforming companies and are encouraging proxy advisors to adopt a principles-based approach on the issue.
  

• The California State Teacher’s Retirement System’s (CalSTRS), with US $125 billion in investment assets, files shareholder proposals to seek greater diversity in the boardroom. Five companies targeted have already taken the significant step of changing their Nomination Committee charters to facilitate the diversification of their boards.
  

• Calvert Asset Management Company, Inc., a leading provider of sustainable and responsible investing, announced that it had filed its 50th shareholder resolution on diversity. Since 2002, when the firm began advocating for minority and/or female representation on corporate boards of directors, Calvert has engaged hundreds of companies on this issue, through both letters and shareholder resolutions. The firm has successfully withdrawn 34 resolutions and remains in dialogue with another nine companies. Among 44 companies which they have targeted, 26 female and/or minority candidates have been added to boards.
  

• Swiss-based Naissance Capital launched the Women Leadership Fund in 2009. It will invest in companies with a market capitalization of more than US$200, more than $US10 million in liquidity, and a greater than 20% average of women in key roles and a favourable gender policy and track record.  Firms scoring well in gender diversity are presumed to be good investments.