The case for diversity is well established in all spheres of endeavour and few will quarrel with it. It is proven that a group with many different 'mind wirings', 'capabilities', 'experiences' 'education systems', 'personality traits', 'world views' 'perspectives' - call them what you may - together can achieve far more intellectually superior, innovative and de-risked outcomes on any issue than a homogeneous group can.
Does this apply to gender diversity as well? Even super-achieving women
who have stormed entrenched male bastions will agree that men and women, while being equal, do have significant differences on many of these parameters. Whether these differences are due to inherent traits or the socialisation process is another debate altogether, but it is what it is and many power women would agree with 'vive le difference'. They may violently contest the stereotyping of women, and with good reason; but they will agree that including women in an all-male group does create positive diversity and hence superior outcomes - and there is plenty of blue blooded academic research in business that proves this.SPECIAL:Women CFOs still lag behind in numbers
In addition to this generic case for diversity, there is something special about corporate (or any other, for that matter) boards that makes gender diversity even more essential, as an examination of the job description of boards will show.
Effective corporate boards are all about 'balance'. They need to be fierce watchdogs and supportive mentors of the management; they must address the hard questions that confront businesses and be tough in their evaluation of management performance - even while uncompromisingly respecting the management's freedom to perform.
They have to be constantly vigilant and sound early alarms against value destruction as a result of any number of reasons - blinkers that a super focussed management in a hyper growth environment is likely to have, incompetent strategy or execution, worrisome value systems, or misplaced risk appetite. Yet at the same time, they have to actively encourage and push for value creation through new opportunities that require management to leap out of comfort zone and take risk, in order to build the future.
Good boards need to balance management's long and short term orientation - in this quarter to quarter, stock price driven business environment, focusing on the next year's business plans and the past years performance bonuses, but also to quote Andy Grove of Intel, "ensure that the success of a company is longer lasting than any CEO's reign, any market opportunity, any product cycle" ; The board's job also includes ensuring the balancing of the good of all stakeholders - investors, employees, business partners and last but not least, society at large.
Boards, like enlightened patriarchs of families, are charged with embedding processes, conventions, traditions that reinforce chosen values, hence ensuring that institutions remain strong and live forever, even while adapting them to the newer contexts that companies operate in; they are charged with ensuring a self perpetuating system both at the level of the management and the board, with an orderly transition from generation to generation.
Some of it sounds exactly like the job description of raising a teenage child, or holding a large extended family together, doesn't it?! But on a more serious note, this not only makes the case for a mix of intellectual, life and career experiences, and skills diversity, but also for a well balanced mix of masculine and feminine traits - of hard edged driving of performance, compliance and wealth generation, and of nurturing and protecting and creating and building .
Researcher Sandra Bem, a Stanford University psychologist developed the concept of 'androgynous' i.e. high on both masculine and feminine traits. According to her, androgynous people can be aggressive or yielding, forceful or gentle, sensitive or assertive as the particular situation demands. And it is androgynous boards that need to be created, and androgynous individuals that should ideally be elected to boards.
However, while we do know that masculine and feminine traits are present in all human beings, the process of socialisation (which is not just what parents do but what society and community does as well) causes one aspect or the other to dull, as does the journey in adult life. So perhaps it would be prudent to start creating androgynous board by having a good mix of men and women on boards.
Let us now examine the issue of why there are such few women on Corporate India's boards. Companies complain that they can't find enough of them. Partly true. But the whole truth also includes the way the nominations committee process works in most boards.
All too often the short listing is done by asking "is there anyone we know who will be good for this board / has xyz characteristics/ what do you think of X (usually a visible public name)". Given the skewed ratio of men and women in visible senior positions, the default option usually is a man. There are several qualified women out there, and the way to find them is for nominations committees to spend some money and advertise or ask a head hunter to systematically create a data base rather than again relying on "does anybody know anybody out there".
Such effort can command price premiums given the demand for at least one qualified woman on board. While appointing external search firms is pretty common in the US and in Europe, in India, with our affiliative culture, the very idea causes discomfort. Nominations committees following more formal search processes and having a bias towards affirmative action will produce a quantum jump in the number of women on Indian boards, without reducing the quality in any way. This would be the acid test of whether companies are willing to walk their talk on seeing gender diversity at board level as a must have.
Should we worry about whether companies including a woman on the board is 'tokenism'? Absolutely not - we should not be concerned with why the opportunity occurred but with what to do with it, now that we have it. Even though being the only one of a kind is daunting, even terrifying, do we show independent thought and spine or do we try so desperately to belong to the male club that recruited us as tokens, and set an easy goal of being 'one of the boys' and fritter away the opportunity to demonstrate the effects of genuine positive diversity? Do we have the courage to speak up and say it like it is, or do we look for permission to do so from colleagues? Do we transact with board colleagues and chairmen in a child-parent fashion to garner support for our proposed action, or do we transact as independent and equal adults?
The challenge on boards is that board members, unlike CEOs, have to be able to wield influence without having any clout, and hang in there and do so in an environment where, as a newcomer and a perceived 'token', your contrary view is often dismissed.
The challenge also is that a lot of the work needed to be done at boards is not about technical stuff where it is easy to prevail. It is about judgements like: What is small stuff and what is big? What is not letting the team down and what is telling the truth? What is being practical and action oriented and what is unwillingness to get to root causes and set things right? And here, as in life, men and women do have differing views.
Women board members shouldn't buy the conventional wisdom of the audit committee being the most powerful, and hence the place to be. That is just where the money gets counted. There is huge long-lasting value to be added to the company and to society on remuneration and HR committees where the board signals to management what else is expected beyond meeting financial targets; and designing reward systems to incentivise value right behaviour.
Nominations committees are crucial because that's where who comes on the board and how (and who doesn't) is decided. That is where the board perpetuates itself from, where board composition is debated and where the future DNA of the board is imprinted. This is the place from where gender diversity of boards can be driven in order to not merely give more women board seats but to build better boards.
The writer is an independent director on several boards and an expert on consumer behaviour.