One of the non-controversial statements that I have read recently is “The healthiest economy is one that uses its human resources most efficiently”.
Lack of women on the corporate board is definitely a symptom for lack of diversity. This means that we are not using our human resources very efficiently. Britain is also inching towards following other countries like France, Spain and Norway in introducing compulsory quotas for women in corporate boards. Some of the basic gender based problems are earning gaps and glass ceiling. This step will at least answer the gender problems and bring in equality. The main problem for the organizations though, is not just about having women in their board, but about having a diverse voice.
Most of the boards essentially have multiple CEO voices, rather than voices that represent different points of view and perspectives. Most of the people on the board have been brought up in the culture of large corporations and have spent their life creating shareholder financial value. Due to the structure of the organization, many critical issues are not even raised and discussed. Due to group think in the board, it is also very easy to miss out on some major problems.
By having a better diversity, the organization would benefit by higher quality and creative decision making. The diverse group would bring in different opinions and ideas which would help the organization consider more alternatives and think out of the box. The next advantage that organizations experience with diversity is better understanding of customers. We can understand our customers better if we have one of those target audience in the board. This is very much possible when we have a diverse group of board members. Organization will have a more satisfied work force when the employees are being treated fairly, which will eventually result in a better organization performance.
Organizations should encourage openness and increase the diversity in the work force from top to bottom of the organization. One of the best ways to break the barrier that the Europeans found was to make it mandate to have a certain percentage for women board members. Another idea is presented in the article, which discusses the option of having true elections for board members which would make it possible for candidates from different backgrounds appear in the board. I think that along with these different ideas, it is also very important to build a culture of respecting diversity, have some diversity training programs, and check the recruitment process. Building a culture of respecting diversity is very important as it enables employees with different demographics and back grounds to feel a sense of belonging. Taking these steps will help the organizations manage their diversity issues better. If the organizations do not give importance to managing diversity, I am afraid they will not thrive in the long run.
Reference
Krishna Garimella
This relates to my post "Equality for women in the workplace - who is responsible?". Countries can mandate the number of women in organizations at certain levels, but is that the most effective approach? McKinsey & Company have found through research that organizations with women at senior leadership levels and on their boards have advantages over organizations who do not have inclusion of women. Instead of mandating that all organizations include women at their highest levels, would a better approach be to permit organizations to compete and if inclusion of women at the top levels really does provide a competitive advantage then allow organizations to learn this on their own?
ReplyDelete-Jessica Brown
We have some research suggesting that, its more about diversity in the board and not just women which is making a difference for organizations. And as you mentioned they is some research which suggest that women are making a difference. I think, its more about the way the organization wants to look at it.
ReplyDeleteI personally do not like the approach of having a mandatory number of women in the board. But, to break the barrier against gender differences and to provide equal opportunities, they can at least start off using this approach.