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Posted on 15th October 2018
#MeToo - women on boards and why Australia is winning the governance battle

Professor Nada Kakabadse, Henley Business School

The #MeToo movement has driven a well overdue need for women to feel empowered after sexual harassment allegations have rocked the foundations of society. But how has this extended to leadership in the corporate world, where females still remain woefully underrepresented?

Our ongoing work looking at the roles of women on boards has identified some surprising opinions from senior business figures, not least that many women directors themselves feel that enforced diversity quotas are not the answer:

  • “The problem of female under-representation on the board cannot be solved by a quota system. We need systematic education from the bottom up” (Ghana)
  • “No, definitely no quotas! Quotas would undermine our achievements” (USA)
  • “Quotas undermine these women who worked very hard to get where they are now. Organisations can widen the pool of talented individuals suitable for board positions by adopting a level playing-field in recruitment and promotion” (UK)
  • “No, no quotas please! Quota systems will damage our credibility’ (Nigeria)

 Our study of women on boards of the top 50 companies across five countries - the UK, US, Ghana, Nigeria and Australia, has found that increasing gender diversity is seen as an important goal for two important reasons:

  • It is believed to improve the performance and effectiveness of a board
  • It is thought to add legitimacy, increasing employee motivation and loyalty.

 However, our findings indicate that the presence of less than three women on a board has no significant effect on performance, according to a number of both hard and soft measures. This is largely because women, it has been found, are still unlikely to challenge their male board counterparts for fear of being marginalised.

We have also uncovered that the Chairman’s role is crucial in addressing diversity issues in areas ranging from appointments through to the evaluation of an individual’s commitment to the board.

Our study participants share similar social and professional backgrounds, have good social skills, and are strong characters. Their backgrounds make them members of an international elite that largely transcends differences in national culture and economic development.

Successful female directors understand board work. They perceive invisible power relationships, detect hidden meanings and the significance of silences, are familiar with embedded norms and boardroom etiquette, and are adept at building political coalitions.

On the whole female directors feel strongly that women should gain their board positions on merit. Having worked hard to reach the board they are adamantly opposed to any dilution of their achievements by an influx of potential under-achievers emerging courtesy of a quota system.

The majority are proud that their hard work has served to change attitudes about women in the boardroom, and that they serve as role models for women aspiring to emulate their achievements.

These high achievers also feel that other women should have to follow the same routes they have had to trailblaze, and not evade the hard work that is necessary to achieve a board position.

Female directors display a tendency to covet their positions protectively, which suggests that as well as taking pride in their achievements, they may also unintentionally be helping to fuel the current low gender diversity status quo.

Out of this select group of countries, we have found that the disparity between men and women has perhaps been most effectively confronted by Australia. Instead of having representational targets like other nations, the only objective Australians set is how many women they prepare for boards.

The Australian Institute of Company Directors, together with the Australian federal Government, identified 50 top chairmen, and then assigned each of them two people to mentor – at one point 98 women and two men.

These 100 individuals were mentored over an 18-month period so that they could be prepared to become the outstanding directors of the future.

The women in this exercise have proved to be impeccable, able and ready. The Australians avoided an approach that stated ‘if we get more women on board, we have diversity.’ Instead they took the pragmatic step of creating diversity of thinking.

The question now is how many nations are prepared to follow suit?

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