Authors: Peninah Thomson with Tom Lloyd
Publisher: Palgrave Macmillan
In Women and the New Business Leadership, the authors discuss the role women directors can play in the reform of corporate governance systems following recent financial, crises in leadership, governance and the economy.
The financial and economic crisis and the public belief that failings in corporate governance were partly to blame for it have politicized the debate about how, and by whom, our companies should be run. There is a new belief within the political establishment that companies would be better run, and less likely to act recklessly and so put the financial system in jeopardy, if there were more women on their Boards. This is accompanied by an expectation that companies will respond appropriately when filling Board vacancies. Progress towards gender-diverse boards will be watched closely as a proxy for corporate governance reform and a sign that the lessons of the crisis are being learned.
To quota or not to quota?
That's a controversial question and one, which is central to the multiple themes discussed in Women and the New Business Leadership. How do we repurpose our corporations to ensure gender parity in the boardroom?
Opinions on the issue are sharply divided. Some feel that quotas undermine the "meritocratic principle" and deny companies the right to appoint the best person for the job. Some see quotas the book acknowledges, "as heavy handed interventions in the market that are sure to inhibit the movement of directorial talent to its highest value deployment". Others argue that a reduction in market efficiency is a price worth paying to correct the gross under-representation of women on Boards—something that represents a far greater market inefficiency in the first place.
In recent years, several countries have adopted laws to advance representation of women. For example, in 2010, the French National Assembly adopted a law that imposed minimum quotas for the representation of women on French listed companies and public enterprises; Iceland adopted a similar quota law covering listed and privately owned companies; the Netherlands passed a law requiring 30 percent of Board seats and 30 percent of executive positions to be held by women, and new quota laws are being considered in several other countries.
Wherever you are on the spectrum, what is clear is that the voluntary actions of corporations have not created gender balance or gender equality on company Boards.
The authors quote Harriet Harman saying, "The world would not have been plunged into recession if the most conspicuous bank casualty of the crisis has been Lehman 'Sisters'"), claiming that the "more gender-diverse Board has become an important symbol of the new “post-crisis enlightenment." Women and the New Business Leadership is a review of these very challenges facing companies and their Boards with regard to the position of women and their absence in the global financial crisis of 2008.
Perhaps, as the author goes on to suggest, appointing "more women to corporate Boards may be a more effective way to achieve the desired changes in behavior than trying to change the behavior of male directors?”
Nevertheless, it is important to note that the backdrop for the New Business Leadership message delivered in this book is the FTSE 100 Cross-Company Mentoring Programme, in which FTSE 100 Chairmen mentor senior executive women in other FTSE companies, with proven success. Author Peninah Thomson founded this program in 2003 and it became a separate not-for-profit organization called The Mentoring Foundation.
This followed the November 2010 publication by the Financial Times of a special report called Women at the Top, which suggested that Europe lagged behind the U.S. and other countries in terms of the rise of women to CEO positions.
[By November 2010, 15 of the mentored women have been appointed to the board of the FTSE company they worked for, nine were appointed as non-executive directors in a private sector company, seven were appointed as non-executive directors in not-for-profit organizations, eight were appointed to a public sector or government role,
15 were promoted in their own company and three were appointed CEO of a non-FTSE 100 company. A total of 57 "advancements" among a total of 62 mentees.]
Finally, Women and the New Business Leadership explores the qualities that women bring to Boards, and the roles they play after appointment. Part of the advantage of the presence of women is the limiting effect on "groupthink", as well as the depoliticizing of Boardroom conversations. One mentee is quoted as saying: "Women tend to want to get everything on the table, because they believe it is only when all the sometimes painful facts are on the table that the truth of the matter can emerge."
Additionally, the presence of women in the Boardroom supports greater empathy, adaptability, and full and fair discussion, leading to more considered and higher quality decision-making processes.
Positioning women on boards as one of the urgent challenges of corporate governance in the post-crisis 21st century and Women and the New Business Leadership makes a powerful contribution to the body of knowledge and experience of what works and what hasn’t worked.
Peppered with profiles and quotations as well as input from a range of the FTSE 100 Chairmen participating in the mentoring program, this book offers a fascinating range of perspectives on women and leadership, practical directions that can make a difference and compelling arguments for more gender-diverse corporate leadership.