We all know plenty of companies with an all-white male board, whereby the average age resembles one you might find in a retirement home. It not only makes a pathetic group photo but sadly also stands for a dysfunctional governance model, where a conservative world view dominated by groupthink fails to capture the potential value of the company. Enlisting one or two women as a shield against justifiable criticism only serves as lipstick on a pig. They figure as trophies rather than as leaders. Given the dynamic nature of today’s economic environment, the enormous challenge digitization causes and the speed of change a company needs to keep up with, any board should consist of agile customer-centric leaders who embrace new business models, champion transformation and mothball the old boys network where incrementalism rules. BeBoldForChange, the theme of this year’s International Women’s Day, is never something a board will propagate or defend. Forgive me the cheap paraphrase but Boards live by Be Bald and only Change when all other avenues are closed.
The board is however only the tail-end of the problem as it is practically never a catalyst for change. The real issue plays at the executive level and below. There companies clearly do not pull from the fullness of their talent pool. While everybody agrees that diversity leads to better results, the underrepresentation of women in middle and senior management remains striking. Clearly the executives in the last 50 years have lacked the courage and dynamism to address this issue.
The question remains what companies can do to avoid any loss of talented women on the career ladder so gender parity at the executive level comes naturally. Equal career-path development and remuneration are not enough. Nor are reinventing the workplace, CEO commitment and company-wide change programs. Although important and contributing, soft targets and awareness initiatives do not move the needle. The only thing that really signals the commitment of a company to diversity is its direct correlation to pay. Only hard targets, where variable pay is won or lost, will motivate lower, middle and senior management to address the issue. Treating the diversity target the same as a revenue or operating margin target from a reward standpoint is a prerequisite. Missing the diversity target should weigh as strong as missing revenue or operating margin.
There is more companies can do. The traditional leadership style and the traditional performance model are not helping. There’s a strong male bias to both. There is also more that governments can do. Creating the conditions and legal framework for equal opportunities never stops.
I have been lucky in my career to meet and work with great female leaders. I cannot thank them enough as they’ve enriched me beyond recognition. Sadly, I’ve seen too many not get the recognition, reward and promotion they deserved. This blog is for all of you. You represent an ocean of untapped leadership. Forty-five years ago, John Lennon sang ‘Woman is the nigger of the world’. It would have made an obvious piece of music to conclude this blog but today, I want executives to think.