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.