When I started reading Kim Elsesser’s Forbes article, The Truth About Women’s Impact on Corporate Boards (It’s Not Good News), the “not good news” part gave me pause – until I read the article.
Elsesser debunks three widely promoted arguments about the impact of women on corporate boards. And it’s about time. These three arguments for diversifying a board with women directors have never rung true to me – and I’m sure they don’t ring true to others experienced in board service.
The Argument: Companies with more women on boards experience greater financial performance.
The Fact: This assertion has statistical problems. As Elsesser points out, there is no control for the causality, and thus implying that the presence of one or more female board members is a critical factor over all other factors that contribute to increased profits, is absurd. When Elsesser and her team ran more sophisticated techniques that control for “third” variables the impact of female board members on financial performance disappears.
The Argument: More women on corporate boards leads to more productivity and better problem-solving.
The Fact: According to Elsesser, research doesn’t support this idea. Large studies to assess the impact of diversity on groups suggest there is no advantage to gender diversity.
The Argument: More women on corporate boards leads to higher CEO pay.
The Fact: Again, as with the financial performance claim, this assertion fails to take into account confounding third variables, such as greater profitability of the organization, that likely contribute to higher CEO pay.
Why should we see Elsesser’s debunking of these arguments for diversifying boards with female directors in a positive light? Because it leaves us to focus on the most important argument for hiring female board members, one that rings true.
There are many extraordinarily talented and capable women who have the potential to make a significant contribution to a boards of directors. The reason to hire them is not because you believe in statistically flawed arguments, but because you want your board to be comprised of the best talent you can assemble.
I work with several start-ups run by 30-something men who have made a commitment to create diverse teams in their companies – especially in their engineering groups. It’s not easy for them to find and hire women engineers, but they do it – by going the extra mile in recruitment. They reach out to alumni organizations for female engineers, attend and speak at conferences for women in technology, host events like hackathons and tear-downs for women engineering groups and girls interested in engineering, and network like crazy to make sure they include women in their interview lineup for new hires.
It may take more effort to recruit talented women to a board, but as my start-up leaders have found, it’s worth it, because by diversifying their search methods they find the best talent, even in fields where women are under-represented.
My challenge to board members is to actively recruit qualified women in their network, and develop a board recruitment strategy that goes the extra mile to identify and consider women, and not because of silly statistical arguments of better performance and problem solving – but because with a bit of extra effort you can be sure you’ve given your board search the extra juice needed discover the hidden talent that exists outside of your professional networks. Talented and capable women deserve opportunities to serve on boards, and boards deserve the opportunity to benefit from their service.
Kate Purmal is a C-level executive, board director, strategic advisor, angel investor and co-author with Lisa Goldman of The Moonshot Effect,Disrupting Business as Usual. The book is now available for purchase in hardback and e-book formats on Amazon.