The issue of women on boards continues to make headlines. Many countries are wrestling with the idea of quotas and others have already implemented it. Josef Ackermann, chief executive of Deutsche Bank Germany, recently made a remark about this issue which got him in a lot of hot water. Responding to a question at last weeks annual results conference he stated "I hope it will be prettier and more colorful one day". Mr. Ackermann's comments were attacked by many prominent women in German business, including Ilse Aigner, minister for consumer affairs, saying: "Whoever wants things more colorful and beautiful should go to a flower meadow or museum".
Mr. Ackerman here are a few words of wisdom for what to say next time. "We are well versed in the incredible amount of evidence that greater board diversity leads to better decision making and are trying to get over this white male bias that clearly is reflected in our current lack of diversity. We say we cannot find talented women to fill these board seats but really, we are not trying very hard and this will change. We recognize that women are half the population, are clearly as smart and capable as men, and although there are fewer women with CEO experience that is often a prerequisite for board placement, we will find the talent BECAUSE we know that greater board diversity will lead to better outcomes. We did not do well in the financial crisis as you know, and our hope is that a more robust board going forward will help us weather the next storm more soundly."
Some facts
"Deutsche Bank has no female executive board members and last year only 2.2% of executive board members at the 30 companies in Germany's blue-chip DAX index were women. Germany also came last in ranking if women's representation on executive boards."
- 14.8% of Fortune 500 board seats were filled by women (2009)
-15.4% of Fortune 500 corporative officers were women (2009)
-During the four-year span of their study, Fortune 500 companies with the highest percentage of women on their boards, and greater numbers of women in the clout titles, saw 53% higher returns on equity than those companies with the fewest number of women on their boards.
-Return equity for companies with at least three women on their boards was 16.7%, compared with 11.5% for the average company.
Our foundation has created a "Why Diversity on Corporate Boards Matters" Brief - if you would like it please email me at pursepundit@gmail.com .
3 comments:
Sometimes I think I'm living in a parallel universe. I cannot understand why the issue of women on boards is not a no brainer. Just over half the population is female. Women make so many of the purchasing decisions.It makes sound economic sense to have a board with significant numbers of women on it. Women bring different things to the (board) table. Not necessarily better or worse, but different.
I think in this instance we need quotas to force companies to develop and bring on their female talent. But of course, that may mean they have to take a less male view of the world and look at all their working practices from a gender neutral perspective!
And that's where we'll see real change! Maybe then working at board level will be a more attractive prospect to females who currently have to adapt to a very malecentric model.
An analysis that states an average return for companies and ties it to the number of women on the BOD is painfully incomplete.
The most rudimentary statistician knows you cannot pick 2 variables from a plethora and leave the others fluctuating, and assign cause and effect.
Compare banks, or chemical companies, or PC makers, try to compare LIKE companies.
Compare over a VERY long time to take cyclical nature out
Said companies mustn't have made divestitures or acquisitions during the study period
I'm surprised and disappointed that writers with the financial savvy of these would claim such a thing in such a way, include such a very weak piece of data, knowing full well it will be the one that is the quotable.
@Jane....
If its "not better but different" why do it? See, there is a goal, the goal is profit....NOT "being different"....JUST profit. Diversity is a word we like to use, full stop.
There is no tangible demonstrable benefit to it, it tickles emotions to be sure, but it is not a provable benefit or detriment. Indeed its impossible to prove either way, and the writers here, as capable financial analysts know that what Im saying is 100% true
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