By Maria Moats, Head of PwC’s Governance Insights Center, and Shannon Schuyler, PwC’s Director of Purpose and Inclusion
The board of directors plays a vital role in realizing the strategic vision of an organization. As stewards, they help guide the organization through difficult times and are responsible for providing strong oversight that can help sustain future success.
Ideally, the people sitting around a corporate board table will each provide different skill sets, areas of knowledge, and varied work and life experiences that collectively strengthen the board. But when too many sitting directors have similar backgrounds, the diversity of views can suffer.
Increasing board diversity is by no means a new discussion. Board diversity has a number of benefits, and directors shared how valuable it is. According to PwC’s annual survey of corporate directors, directors agree that increasing board diversity brings unique perspectives to the board (93%) and improves shareholder relations ( 90%). More than four in five say it improves board performance (85%), and around three-quarters agree it improves strategy/risk oversight (76%) and business performance more widely (75%).
With developments such as the new Nasdaq listing requirement, we are already seeing positive changes. Additionally, large institutional investors and other stakeholders are also demanding more diverse boards, but the fact remains: only 30% of the director seats of S&P 500 companies are held by women.
Although growing pressures are helping to address this gap, men still far outnumber women on corporate boards and much more needs to be done to provide equal opportunities. In order to unpack how best to increase female representation at the board level, we should examine where boards and management teams typically find their director candidates.
The pool of director candidates
Traditionally, when looking for new director candidates, boards and management teams seek out retired or serving CEOs and other senior executives because of their level of experience. However, when you look at the breakdown of women in the S&P 500 who are currently in leadership positions in companies, only 26.5% are in leadership positions and only 6% are female CEOs.
While there are ways to expand your network and broaden your pool of candidates beyond traditional channels, as well as ways to create opportunities for board composition change in the short term, there should be a long-term solution. Without a change in mindset about how to support women in the workforce throughout their careers – a mindset that helps them rise to leadership and leadership positions – we are unlikely to see significant progress for women.
Provide support to foster the career growth of women at all levels
Supporting the career development of women from the start of their professional career and throughout it is of the utmost importance. By working to remove barriers and providing them with the flexibility, benefits, and mentorship they need to succeed, we can help elevate more women to leadership, leadership, and ultimately, to board positions.
There are other challenges women in the workforce face, especially when it comes to responsibilities outside of the workplace, such as caregiving. Whether caring for their own children, disabled relatives, elderly parents or sick family members, the caretaking role and associated responsibilities often fall on women.
Additionally, many women face cultural and systemic barriers that prevent them from advancing into leadership positions. This is why it is so essential to provide equal support and opportunities for women to advance their careers. Here are some ideas, some of which we have incorporated at PwC, for where to start:
- Promote career development: Design programs that help engage, motivate and retain diverse talent. At PwC, we launched Enrich: a multifaceted experience designed to cultivate leadership among racially/ethnicly and female executives and directors. We aspire to increase our female pipeline of potential partners by 50% by 2026.
- Building Flexibility into Benefits: There is no one-size-fits-all approach to managing responsibilities outside the office. Offering a number of flexible work options and care benefits can help better balance work and personal responsibilities.
- Create development opportunities: Create more learning and development experiences for ethnically/racially diverse women and executives. For example, PwC’s Trust Leadership Institute aspires to dedicate at least 50% of the 10,000 targeted seats to women and/or racially or ethnically diverse executives.
- Promote the alliance: Engaging the majority to advance women in the workplace is also fundamental to change by fostering understanding and providing training to help your employees lead candid conversations and engage in acts of inclusion and diversity. alliance by leveraging their own privilege to help support women.
Train the women leaders of tomorrow
With the right support, women can have the personal lives they want while leading organizations. As leaders, those in positions of power should leverage their influence and help provide equitable growth opportunities for future women leaders and the tools they need to excel in their careers. This, combined with access to benefits that provide more flexibility, will allow women to flourish, grow and rise through the ranks to top leadership positions, paving the way for more seats around the board table.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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