Monday, February 9, 2009

Women, Tokenism, Profits, and Corporate Boardrooms

Recently, a few articles came to my attention which I find extremely interesting.

The first described a study done by McKinsey in Europe that showed that corporations with women on their board of directors tended to make more money than companies that didn't.  Not only that, but the MORE women there were, the MORE profitable the corporation was.  Those companies also tended to score higher in metrics of "organizational excellence."

At the same time, the article also described a study done on US Fortune 500 companies which showed that companies with the highest proportion of female directors were more profitable and efficient.  This, to me, is fascinating.  You'd think, in this age of greed, that companies would be scrambling to put women at the top because of this.

But the more interesting thing is this, and I'll quote:

A sole woman on a board often feels marginalised, according to research reported in Harvard Business Review last December. The appointment of a second woman can help reduce this isolation but can also create difficulties: two women may have to be careful not to be seen as “conspiring”, said researchers Alison Konrad and Vicki Kramer, who interviewed 50 women directors, 12 chief executives and seven corporate secretaries at Fortune 1000 companies.

A “clear shift” occurs when there are three or more women, they found. The women tend to be seen just as directors, rather than female directors, the boardroom dynamic becomes more collaborative and the discussions richer and more informative.
I think this has implications for academia and science too.  This means that a department can't trumpet their commitment to diversity, and then hire The Woman, and perhaps even The Black Man.  Tokenism doesn't help all that much.  What really matters is getting to a critical mass such that the minority person ceases to be The Minority Representation and is just a member of the group.

At the same time, we can't forget that the quality of women matters.  Obviously, you can't just pick random women and put them in corporate boardrooms and expect to make higher profits.  The CEO of Lloyd's bank in the UK runs a bank with half female directors, but emphasizes that those ladies were the best for the job.  As he says, "I think it has to do more with the quality of the women than the fact that they are women."

Clearly, from this CEO's perspective, there is no dearth of female talent with which to fill his board.  But why haven't other companies placed talented women into positions of leadership?

Well, that question became moot in Norway, where a few years ago the government MANDATED that all companies have 40% female directors, or face closure. At the time, there was a big hullaballoo, but the reason given was that putting women on boards was not fast enough, and that "for a woman to get in, a man must get out.  It is not difficult to find qualified women." (citation)

So the other interesting article was a followup on this Norwegian experiment, which at the time yielded predictions of the collapse of the economy.  Well, it turns out that hasn't happened.  The article doesn't actually give numbers, but female members of boards have increased very dramatically, but the nation has managed to keep its yearly budget surplus despite the infusion of female talent.  They have even inspired Spain to consider the idea.

The man who pushed through this law, Ansgar Gabrielsen, says his motivation was just that it was supposed to be good for business (citing the first article), and that it seems pointless to educate girls only to not utilize them at the top.  He also says he's not a feminist (which he says is probably partly the reason it got through).

Anyway, when is this research (done on US companies) going to change the way US companies are run?  Or perhaps trickle into other aspects of life (like science and academia)?

One can only hope.

11 comments:

DNLee said...

hey, I'm glad I discovered your blog.

I submitted your blog to the Black Blog Rank - a monthly ranking of all known black authored blogs. I'm trying to get more black science-related blogs on the list.

Check it out.

http://electronicvillage.blogspot.com/2009/02/top-ten-black-blogs-feb-2009.html

PhizzleDizzle said...

shoot! I am not black...I hope I didn't misrepresent myself. It's just that I feel strongly about advocating for all minorities...I'm strongly minority (in my field) for being a woman, and I feel solidarity with other minorities.

But I did have a friend in college who encouraged me to join NSBE :).

However, have you read Juniper Shoemaker? She's got a blog worth submitting...some of her more personal posts are really compelling.

JLK said...

We can always hope that this will trickle into the US, but I am disheartened by remembering all the other wonderful things that non-US countries are doing that we just can't seem to work out here.

Like paid maternity and paternity leave that is federally mandated, for example. Or government-paid higher education. Or universal healthcare.

My current favorite country in the WORLD is Denmark, with their socialist democracy model that not only promotes equality for men and women, but also creates equality of work in general. If a doctor makes the same amount of money as an artist, you're free to choose the path that makes you happy. And with government childcare, both parents are free to pursue their careers with passion.

Interracialmatch said...
This comment has been removed by a blog administrator.
PhysioProf said...

Fascinating, and not at all surprising!

Mrs. Comet Hunter said...

Very interesting post. Thanks for sharing!

DNLee said...

My bad...let this be a lesson to Everyone, j2ust because someone is very comfortable and use hip-hop and urban colloquilaism well doesn't mean they are black. There have been times I wondered about Dr Isis.

Reading your entry for the Diversity in Science carnival and your first person accounts I just knew. Shoot. Oh, well. thanks for straightening me out.

Hermitage said...

Girl, you have Phizzle in your blogname, stop misrepresentin'!! Ok, just kidding. Excellent study to show that the female hormones A) Do not induce brain damage in men B) Do not induce brain damage in women. It does appear the sexes can work together in harmony! Who knew?

PhizzleDizzle said...

JLK, I've been meaning to comment back about Denmark. I find Denmark also to be a fascinating case study, but I think one of the keys to their success is being extremely homogeneous. I saw a special on Denmark in the last year or so which stated that like some 98% (or something like that) of people living in Denmark are Danes. So when you ask a random person on the street whether they feel happy about being taxed up the hoohah in order to provide greater good and redistribute it in terms of health care, etc. they are all happy to do so. One person said, "We are all Danes, after all, we have to take care of each other."

As much as I would like to hope that their model of governance would work in the United States, I don't think it actually would because the US is so filled with "us-them," cleaved along many different axes: GOP/Dem, rural/urban, black/white, rich/poor, red state/blue state, gay/straight, male/female...When Americans are taxed, there is a non-trivial contingent of people who can't stop thinking about how money THEY earned is going to some "other" - a totally different attitude than the Danish have.

So, part of me wishes I were Danish so I could take part in this lovely society, but I don't think their model is transportable. Parts and bits of it maybe, but not generally. Sigh.

JLK said...

You have stunned me, PD. What an excellent point! I didn't even think of that.

I guess we'd have to turn into a country that no one ever visits in order to change that mentality. Because really, what percentage of us are "Americans"?? Probably a number similar to the Danes. But we subdivide ourselves a thousand times over

I always would have chalked it up to simple selfishness and individualism, without the addition of identity that you so brilliantly just made!

Honestly, and this may sound shitty to some people, but I think our country is just too goddamn big. There are distinct regions that have distinct values and mentalities from the rest of the country, and the trouble with government is trying to make decisions that keep everyone in mind when there is always a huge group opposed to what they want to do.

Imagine if the Northeast was it's own state - we'd have universal healthcare, pot would be legalized and regulated, everyone would pay a shitload of taxes that would give us great schools, higher education, etc. - we would have what Denmark has, because the Northeast is a cluster of people with the same values, with a relatively small number of dissenters among us.

The south could have what they want. So could the mid-west, the plains states, the west coast. Florida would have to make up its goddamn mind. lol

People more readily identify themselves as belonging to a region, and sometimes even that doesn't work. Like when people from other parts of the country find out I grew up in Mass, they assume I'm going to have a Boston accent. And I'd respond quickly with "Oh, I'm not from Boston. Most of the state doesn't speak the same way."

I could go on and on with this because you sparked my brain into thought this morning!

PhizzleDizzle said...

JLK, I am pleasantly surprised to have stunned you!

I agree with you, sometimes I do just think the country is too big. When you have a democracy, which us as large and UNhomogeneous as ours, decisions will not only be slow in coming, because there will be sooooo many disparate opinions on what the correct policy is, but any ultimate decision is bound to piss off lots and lots of people.

At the same time, some of the power of the US comes from a) the melting pot, b) the ginormous natural resources Manifest Destiny have accorded us, and c) the great number of differing ideas people have about how to do things.

I don't know. Can't I just be Danish enough to get health care and paid maternity leave in Denmark, but spend my evenings walking NYC and having my choice of Indian, Italian, Portuguese, Chinese, Mexican, Japanese, Korean, or Ethiopian food?