[IMGCAP(1)]Despite comprising nearly half of our country’s population, women hold significantly fewer positions of leadership than their male counterparts. This is across the board, spanning both the public and private sectors.
It is incredibly apparent when you step into the boardroom, where the percentage of women member remains stagnant. A recent survey by Harvard Business School, Spencer Stuart, and the WomenCorporateDirectors Education and Development Foundation found that traditional male networks continue to be male dominated. By one estimate, women only account for about one out of every six corporate board members.
Yet, studies also show that greater diversity on corporate boards ultimately benefits business.
Our nation needs to address this severe lack of representation, recognizing the value that women bring to all aspects of life—in their offices, communities, families and boardrooms.
A new measure by Rep. Carolyn Maloney, D-N.Y., is a necessary step toward narrowing this gap, and illustrates the value of greater gender diversity. The Gender Diversity in Corporate Leadership Act would require the Securities and Exchange Commission to establish an advisory group to study and report on gender diversity within corporate boards, complete with recommendations on how to increase this diversity. The measure also would require publicly traded companies to report the gender of board directors and nominees.
Diversity of thought and of experience is a key component to good governance. In fact, studies have shown a gender diverse board typically performs better financially. Many countries around the world have recognized the value women bring to business and have encouraged, if not outright required, companies to place women on boards.
Congresswoman Maloney understands that at the very least, an awareness of a company’s commitment to diversity, as demonstrated by their board composition, is important information to shareholders. A report she commissioned from the Government Accountability Office last December noted that there may be an unconscious bias against women in order to maintain a “level of comfort in the boardroom,” and that the gap narrows only slightly among larger companies.
ACCA, the Association of Chartered Certified Accountants, the global body for professional accountants, has reported on the representation of women not just on boards, but in the finance profession as a whole. Our analysis noted that gender diversity delivers an important value for companies, and that it is where employers can make the biggest initial progress: internal data on gender is typically more readily available than that on ethnicity or disability, for example.
One way, ACCA found, is to demonstrate shareholder value of greater diversity, including profitability, return on investment and effective budget management.
A lack of female representation on corporate boards may, unfortunately, indicate systemic problems. In the United States, a lack of equal pay, parental leave and other family friendly policies certainly disadvantage women.
Government and business need to work together to promote women in the workforce at all levels, including on corporate boards. And women should more assertively display confidence in their skills and experience. They need to be their own best advocates.
A company performs better when women are represented on boards. If you invest, research the board composition of the companies and invest responsibly (remember, this will pay off!). And if you’re a woman, know your worth: negotiate your positions and pull up your seat in the boardroom.
Simply put, women are good for business. And that’s a bottom line that businesses cannot—and should not—ignore.
Julie Missimore is the director of policy for ACCA USA. Founded in 1904, ACCA (the Association of Chartered Certified Accountants), is the global body for professional accountants with 178,000 members and 455,000 students in 181 countries.
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