Experienced CEO and founder of How Women Lead, venture capitalist and sought-after speaker on female entrepreneurship.
The past year’s bank collapses, return-to-office controversies, activist investors and high-profile implosions of various companies have many stakeholders questioning business decisions. Government regulators are also taking action with new SEC rules on cybersecurity and climate disclosures in the works.
So, how do companies confidently move forward?
Bring more women into the boardroom.
Diversity in the boardroom brings a host of benefits. Companies with women directors often create greater shareholder value. More diverse boards can also lead to better reputational management, and one study found that companies with women in the boardroom recalled dangerous products 28 days faster. Finally, many have noted improved investor relations and strategy/risk oversight.
In an age where boards are concerned about composition, women bring much-needed expertise. Take the cyber industry: “There is a total shortage of 2,724 directors with cybersecurity expertise across all Russell 3000 companies,” according to Brian Walker.
Yet 17% of CISOs at Fortune 500 companies are women who can certainly help fill that shortage. Matching experts with relevant board director openings would be a double win for companies. Not only would they be gaining the cybersecurity expertise needed, but the visible advancement of women into top leadership roles can contribute to talent attraction and retention at entry-level and middle ranks, a notoriously thorny problem.
Diversity limits risk. Groupthink is at the center of many high-profile bad decisions and debacles. Diversity of thought is protective for companies and, along with an egalitarian culture, can result in better strategic decisions.
Yet, I’ve found women in the U.S. are seeing increased difficulty in finding their way to the boardroom.
So what can we do?
1. Trust women’s thought leadership.
Are the experts you are calling into your board meetings women? Seek them out! Bring in more women to present. The women on your board and in your C-suites are writing books, speaking and publishing articles. Is your company helping to amplify that?
2. Share the importance of intentionally bringing on directors with diverse backgrounds with your fellow board members.
Particularly for those on private boards, bias and systemic issues have resulted in poorer diversity representation on most private boards compared to public companies. To change that, we need to engage with private equity and venture firms to make them aware of the pool of talent they are missing. Contribute to the ecosystem of women-run venture firms where the environment isn’t so hostile.
3. Network.
Don’t wait until an opening occurs to try to build a diverse candidate pool—you’ll just be left scrambling. You need to proactively source and seek out organizations working with diverse board directors. I recommend current Directors continually seek introductions to top-performing women. Then, when the time comes, you will already be connected to a qualified network to fill your board vacancies.
Companies need the diversity of thought that women can bring to their board to face the many emerging challenges caused by governance evolution, demographics, a tsunami of risks and the importance of stakeholder primacy. By addressing these issues from a broader perspective due to diverse thinking, companies can get ahead and be seen as leaders at the top of their industries.
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