Last week, New York Times OpEd columnist Nicholas Kristof joined the chorus of writers and academics calling for public companies to add women to their boards of directors in a piece called “Twitter, Women and Power.” Mr. Kristof criticized Twitter, which is scheduled to launch a blockbuster IPO in November, for seating its board with seven white men. He writes: “. . . the main reason to add women — not just on Twitter’s board, but in politics, business and the news media — isn’t just equity. This shouldn’t be seen as a favor to women but as a step that would be good for all of us . . . In business, there’s abundant evidence that inclusion of women in senior positions is linked to better results.”
Mr. Kristof cites a number of research reports that provide an overwhelmingly strong case for women’s inclusion on corporate boards. These studies find that companies with women on their boards yield higher operating profit, higher return on invested capital and “generally results in increased value for shareholders.” The findings are compelling, indeed, but not new. (See prior post: The Case for Women on Boards: Taking the Long View.)
It seems that every month a new study is published that demonstrates, once again, that with increased representation of women on boards and in leadership, performance (by many measures, including client satisfaction and profitability) increases with it. And still, the number of women on boards has hovered between 14% and 17% since 2006 and shows little sign of improving. This begs the question: why all the talk and so little action?
I challenge the common refrain that there is a lack of qualified women within the upper ranks. In 2013, that is simply no longer the case. Women now account for 60 percent of college graduates in the U.S.; and qualifications take many shapes beyond pure technical knowledge of an industry. Some of this lack of movement can be ascribed to board composition; boards with no term limits will have fewer opportunities to add a woman to its board. It is hard to deny that many boards have no women because there is no appetite or effort made to change this. We have well established the “why” women should be better represented on boards; it is time to focus on the “how.”
If Twitter can change the way society communicates, surely it can move the needle on boardroom diversity.