Gender diversity within boards is improving gradually, but not at a level that can make an impact. To incite change, boards might have to rethink their processes.
The board of directors is arguably the most influential body at any organization: It makes the big decisions and policies that govern how a business works, and it finds the right people to lead that organization through its successes and failures. But despite the important work boards do, many suffer from a lack of gender diversity.
In fact, a new report from executive search firm Egon Zehnder says that although strides have been made to boost boards’ gender diversity, they are happening so gradually that they do not have the power to incite positive change. More than that, studies show it takes a minimum of three women on a board to make a positive impact.
“For all of the attention given to the topic, improvement remains incremental—and that is unacceptable,” the authors of the report said. “To make a difference, boards must abandon tokenism and hire a critical mass of at least three women. That approach must be directed and supported from the very top.”
The report looked at boards in 44 countries—only 19 of which have at least one female director at each of their surveyed companies. Meanwhile, 25 other countries, including China, Russia, and Brazil, are home to large companies with no women on their boards.
To change women’s board representation, the research suggests that boards might have to fundamentally overhaul their requirements and approach. Many large companies require board members to be experienced directors or CEOs to even be considered for a board seat, yet only 4.8 percent of CEOs at Fortune 500 companies, for example, are women, according to research by Pew Research Center. This means there’s a pipeline problem, and boards must be willing to appoint first-time directors to address it.
“Companies have come to the realization that in this time of disruption and change, the ‘traditional’ perspective on governance is no longer sufficient,” says Jill Adler, chairwoman of Egon Zehnder, in the report. “New voices are needed—and many of those are women.”