How Many Women Does a Good Board Need?
from
January/February 2007
by Lisa M. Ferri
That was the question at the heart of the Critical Mass Project, a Wellesley College study that set out to identify the tipping point at which the number of women on a board actually makes a difference. Researchers interviewed 12 CEOs (three of them women), seven corporate secretaries from Fortune 1,000 companies (six of them women), and 50 company directors (all of them women) who together represented past and present board service at 175 companies. Among the study’s findings:
• “A lone woman can and often does have a significant impact on a board,” the researchers say. But both female and male respondents reported instances in which women directors were ignored or excluded from decision-making discussions and sometimes made to feel that their contributions represented “a woman’s point of view.” As one female board member recalled, being the lone woman in the room initially “felt like I was playing catch-up.” She had to fight the nagging suspicion that critical issues had already been decided in committees she didn’t sit on or during golf games she hadn’t played in. “It was an old-boy network until I asked, ‘How did that get decided?’” she said. “Then they began to ask what I thought.”
The men agreed. One male CEO told researchers that the lone woman on his board had to “break down brick walls to be heard…had to work hard to get into the conversation, almost like not being there.”
• “When a second woman arrives on a board, the dynamics seem to change,” according to the study. For one thing, the two can work together to raise difficult or touchy subjects in a way that encourages male board members to pay attention. The men, however, still perceive gender differences on board matters.
• “The magic seems to occur when three or more women serve on a board together,” the study concludes. “No one woman has to worry about representing the entire gender.… Women start being treated as individuals with different personalities, styles, and interests.” Three, it seems, is enough so that they are no longer seen as outsiders. They tend to ask more questions, including tough ones about CEO pay, and can influence the content and process of board discussions more substantially.
As one respondent put it, “One woman is the invisibility phase; two women is the conspiracy phase; three women is mainstream.” More than three might be even better, the study suggests.
There’s no hard evidence that the number of women on the board affects a company’s bottom line. But the Critical Mass Project argues that boards with three or more women are better at doing what boards were built to do—hash out thorny issues—and that they have the women to thank for it. Female directors, the study says, bring a new perspective informed by their lives outside the boardroom. That may include navigating the realities of being a working mother or making tough choices about health care or product selection, say. By drawing on these firsthand experiences, women change a board’s DNA. “You get a much better sense of what’s going on in the real world if you have the women’s viewpoint in the boardroom,” the male CEO of a health-care company told the researchers.
The study also found that with women at the table, a board’s whole approach to dissecting a problem alters. Skilled at listening, reading body language, defusing tensions, and brokering compromise, women act as agents of change, according to the report, and are therefore able to help ring in a new and improved way of arriving at answers. And whereas many male directors adopt a slash-and-burn attitude, the study found that women are more cooperative—a “voice of reason in the room”—providing the type of leadership that “helps boards do their jobs better.”
Don’t read softness into any of this. As one male CEO respondent observed, men tend to shy away from questions that might imply that they don’t have a complete mastery of the issues, feeling what he called “a gender obligation to behave as though they understood everything” even when they don’t. Women, on the other hand, aren’t afraid to put their egos aside and confront what the report calls the elephant in the middle of the room.
