30 Oct Women on Board=Outcome Stakeholders Expect
Julie Castro Abrams
We have entered the age of stakeholder activism in business. Investors are stepping up, saying, “Enough is enough,” and demanding companies do right while bringing a profit. Just look at Nia Impact Capital CEO Kristin Hull, who as an investor urged Tesla to create better business practices. It’s no surprise that investors are concerned.
A poor workplace culture, beyond opening up a company to costly lawsuits and payouts, also drains leaders’ mental energy from running the company and giving investors the ROI they expect.
So what can companies do? Include more women on their boards. It has been shown that increasing diversity on boards leads to better fiscal performance.
What happens when you add more women to boards?
Organizations with more women on their boards are reaping the benefits by:
• financially outperforming their competitors by 15 percent when they have gender diversity on their boards.
• enjoying better share-price performance.
• realizing better risk management and safety. A study of medical product recalls, for example, found that two or more women on boards resulted in high severity recalls being announced 28 days sooner. That protects not just consumers, but also a company’s image.
Why is gender diversity so protective and powerful? Women on boards bring in a diversity of thought, background, and experiences that forces boards to halt “groupthink” and, instead, encourages effort and engagement to more fully consider the issues at hand. Diversity also brings about better financial performance.
HOW TO GET ON BOARDS
Women face barriers, both perceived and actual, to getting on boards. So how can you move forward into your seat at the boardroom?
Seize your power as an investor. Investors are the first board directors, instrumental in shaping board culture. My organization, How Women Lead, is on a mission to get more women investing in venture, and to get more money into their hands so they wield more influence.
Be visible. Author articles or blogs. Take on speaking engagements. Start establishing yourself as a thought leader in your industry.
Create a clear and specific ask. Do you want to sit on the board of a high-growth Series D company? Are you looking for a private or public board seat? Not only will this help you to tailor your communications and your pitch, it will also help you with this final tip:
Network. Start with the board or the C-suite at your company. Tell them you are considering board service and ask for their sponsorship. Be clear about the value you bring and the board positions you seek. Be narrow in this communication so it is easy for others to remember and act upon.
We—other women, and the business world at large—are waiting. We need you. It’s time to find your place in the boardroom. Companies need your expertise to remain competitive and provide the results their stakeholders expect. DW
Julie Castro Abrams is chair and CEO of How Women Lead and managing partner of How Women Invest.