A woman’s place is in the boardroom — if you want a better-run business, that is.
Corporate boards with greater gender diversity function better, and it takes just one woman to make a difference. While earlier research suggested that it takes a few women in the boardroom to move the needle, a new study shows that even the presence of a single female board member has a positive impact, especially in male-dominated industries.
“There’s been this number out there that you need three women on the board to make a difference. What I find is you don’t need three,” said Judy Zaichkowsky, marketing professor at Simon Fraser University in Vancouver, Canada, and author of the new research. “The idea that you need to have this big critical mass is not shown out in the data,” she said.
Zaichkowsky looked at corporate governance rankings of large, publicly traded Canadian companies over an eight-year period and found that while more female board members correlated with a higher ranking, companies started to see benefits as soon as they added their first woman to the board.
The “critical mass” idea came from the theory that a single female board member would be perceived as a token with little ability to affect change, but women today who make it to the upper echelons of corporate power don’t see themselves that way, said Shirley Davis, a consultant who works on global workforce and talent management strategies.
“Being a strong female leader in that boardroom is going to give them license to speak up more,” she said. “Women will talk out loud about how they feel about things.”
Zaichkowsky found that the impact was greatest in male-dominated sectors like mining and energy. She speculated that women make boards function better because they focus more on details and push their fellow members to do the same. “I think people pay more attention when it’s a diverse group,” she said.
In both 2011 and 2013, about 40 percent of Canadian Financial Post 500 companies had no women board directors, according to Catalyst Canada. In the U.S., one-tenth of Fortune 500 companies had no women on their boards in 2012 and 2013.
“One of the key attributes boards need to look for is women who ask really good questions,” said Jim Alampi, CEO of executive leadership firm Alampi & Associates, who suggested women are more willing to ask questions and challenge the status quo.
“Even if she doesn’t think of herself as breaking new ground … she’s going to ask questions men stopped asking years ago or wouldn’t think to ask,” he said.
Eric C. Peterson, a senior consultant at Cook Ross, said even one woman on a board could change the communication dynamic among board members for the better. “People are less inclined to use shorthand to say what’s on their mind,” he said.
“It allows you to see the larger picture, including the larger marketplace,” Peterson said. “You tend to see things happening out there in the marketplace that a homogeneous board might not see.”
Since women wield serious personal and household buying power, their perspectives as consumers add value to boardroom discussions, said Ron Parker, president and CEO of the Executive Leadership Council. “They bring insights that an all-male board would not have.”