Lack of female representation on boards of directors remains one of the most prevailing concerns regarding the corporate governance of organizations. Reforms have been implemented by many governments across the world aimed at reducing the existing gap within boards, such as in France, where the Copé-Zimmermann law was established to balance representation in the boardroom.
Even with instituted quotas to accelerate the process, the utopian dream of increased female participation on boards of directors is still far from being realized today. Despite the fact that women want to have a seat at the table or hold strategic positions on boards within many major corporations, their introductions to boards face many obstacles. This “glass ceiling” is based on many factors such as structural or cultural phenomenons, norms and prejudices (i.e. boys’ club).
Female presence on boards raises performance levels
Despite these difficulties, the proportion of women holding strategic positions within major corporations has seen a constant rise around the world. However, are these increasing numbers enough to meet the established quotas? Evidence suggests otherwise. Additionally, while we hear a lot about these quotas, it might be important to take into account that the presence of women on boards or at top management positions has many benefits for an organization.
Many studies have demonstrated that organizations with a higher representation of women in the upper ranks regularly overperform, be it at the organizational or financial level. Organizations have a 10% higher return on investment, which in turn leads to a 1.7 times faster stock growth.
More women means more expertise in the boardroom
Even with ongoing efforts by organizations, the number of women holding seats at the boards of directors is still low. It’s worth considering, however, that women could bring more experience in specific fields of expertise such as risk management, human resources or compliance and corporate governance.
In a previous article, Women on Boards, Why Is It Taking So Long?, we pointed out the fact that female board members of 2000 organizations across 39 countries in Europe, Asia, North America and Australia had more digital experience than their male counterparts. With the ongoing transition towards a more digital era for organizations, this potential aspect of female inclusion on boards cannot be underestimated.
Making their organizations more productive and efficient is the major objective of each and every board member, and introducing more women among their ranks may be the catalyst for achieving this ultimate goal.