Spotting risk, saying the hard stuff and giving everyone a voice are some of the positive marks women make on governance.
Research across North America and Europe has concluded that having women directors on a board adds strength to the organization’s performance.
According to a Catalyst study conducted by Lois Joy, Nancy Carter, Harvey M. Wagner and Sriram Narayanan, “When Fortune 500 companies were ranked by the number of women directors on their boards, those in the highest quartile in 2009 reported a 42 percent greater return on sales and a 53 percent higher return on equity than the rest.”
I’ve seen firsthand the value of women’s contributions both as directors on boards that I’ve chaired and through conversations I’ve had with hundreds of board chairs and directors that are customers of Aprio. Across all of those conversations, a couple of things ring true to me about the rare strength that women bring to boards.
Looking Broadly at Risk
The first thing I’ve observed about female directors and chairs is they have a tendency to deal more holistically and effectively with risk than their male counterparts. Expert research comes to the same conclusion, showing that companies with female directors not only better address the concerns of customers, employees, shareholders and the local community, but also tend to focus more on long-term priorities.
Financial spreadsheets can reveal a ton about an organization, but so can other sources of information, including customer satisfaction scores, employee recruitment and attrition data, and marketing and brand scores—especially when monitored over five years or longer. I’ve had the pleasure of being in meetings where smart women have challenged, “How do we know the customer experience is getting better? How do we know our partners are happy with us?” Probing those real-world questions about multiple stakeholder risk and demanding the necessary data for wise strategic decisions is something I’ve observed women doing well. Which takes us to the next topic…
Getting Elephants Into the Room
In my experience, part of the reason women can be important catalysts in making boards more effective is the impact they can have on board engagement, bringing out a better diversity of voices. I’ve met female directors who are skilled at gauging and resolving communication fractures in a board, ensuring both supporting and contrary perspectives are heard. Engaging diverse perspectives is critical for board performance. As respected governance thought-leader and CUESolutions provider Deedee Myers, Ph.D., reminds us: “Progressive boards engage in dignified and lively debates on central and critical issues.” Women have the opportunity to draw out multiple board voices and let the hard conversations happen.
Giving Everyone a Fair Say
Every director I know, both male and female, aspires to the highest level of governance transparency in bylaws and board manuals. But I’ve known several female change-maker CEOs and board secretaries who have realized remarkable transformation in their organizations by putting clear governance policy into action with daily board management practices that ensure equal access to board information and an equal voice on decisions. Our team often gets to know these change agents when they seek out our board portal technology.
Equipping visionary women with technology that ensures diverse voices can equitably be heard is a powerful thing. For example, when board information and updates are circulated through Aprio’s portal, all directors receive an email alert at the same moment with access to the same information. Without a portal, there is always the temptation to send select directors information or respond to one-off requests via email, both of which hamper governance.
Additionally, in moments where a vote is required between meetings, Aprio survey tools ensure all directors can be engaged from anywhere in the world, and are invited to make a vote of the same weight.
Look to Women for a Board Superpower
Any steps that boards can take to engage women as directors will bring strength to their governance—whether it’s in reducing risk, improving communication and collaboration, or enhancing the board’s transparency and engagement. I’m proud of Aprio’s role in helping to level the playing field for director participation and ensuring directors of all genders and diverse perspectives have an equal say in an organization’s strategy and decisions.
Rebroadcast post by Ian Warner, President & CEO of Aprio, originally published in CU Management: Advancing Women issue. Learn more about CUES services and programs for educating and developing credit union CEOs, directors and future leaders.