Women are on track to gain a record number of board seats by year's end, the Wall Street Journal reports.
From January to May, women made up 31 percent of new board directors at 3,000 of the largest publicly traded U.S. companies, according to a data analysis by corporate governance firm Institutional Shareholder Services. That's the highest percentage of female board seats in at least a decade.
Some notable 2018 board selections include those made by collaboration platform Slack, which appointed Edith Cooper to its board in February, and beauty company Estée Lauder, which added two female board members in April for a total of eight women on its 17-person board.
This increase in female board representation shouldn't be all too surprising, given a growing body of research showing that diverse boards improve business performance, as well as the gender inequality issues that have plagued companies over the last year.
In August, a 10-page manifesto by a former Google employee sparked national outrage and brought the opposition women face in the male-dominated tech industry into the spotlight once again.
Months later, women galvanized to share their experiences dealing with workplace sexual harassment. The ensuing #MeToo movement led to the toppling of prominent businessmen like Steve Wynn, the founder of Wynn Resorts. In April, the hotel chain added three women to it's board in an effort to refresh the brand after Wynn resigned as CEO and chairman.
Companies are also feeling pressure to diversify their boards from large investment firms, who see a positive correlation between diverse board selection and greater financial returns.
BlackRock, which has taken an increasingly activist approach to how the company does business, recently urged its portfolio companies to up the number of women on their boards.
"We would normally expect to see at least two women directors on every board," the financial behemoth said in a set of proxy voting guidelines published to its website in February.
The effectiveness of these investor demands can be seen with Amazon, whose leadership has historically lacked female representation. In April, the retail giant pledged to include women and minority candidates in their board candidacy pool, following shareholder complaint.
But it's not all good news. The ISS data found that companies have not promoted women at the same rate into leadership board positions, even though they come in with greater qualifications than their male counterparts.
"OUR PROGRESS ON GETTING MORE WOMEN ON BOARDS HAS BEEN SLUGGISH AT BEST."-Sallie Krawcheck, Ellevest CEO and co-founder
Even more troubling, about a dozen of the largest U.S. companies have yet to add even a single female director to their board, according to a previously reported analysis by Equilar and CNBC.
To combat statistics like these, some are pushing for quota systems that would require equal gender representation on boards. A number of European countries have already adopted this strategy for company boards, including Germany, Norway and France.
But these mandatory targets have yet to catch on in the U.S. Some states have adopted nonbinding resolutions, pushing companies to diversify their leadership teams. The California state legislature is considering a bill which requires that publicly-held corporations add at least one woman to their board.
In a CB Insights panel on Thursday, Ellevest CEO Sallie Krawcheck said that while she has opposed gender-related quotas, she might one day change her mind, and feels they're "underrated."
"Our progress on getting more women on boards has been sluggish at best, despite all the research that shows it can drive superior performance," she tells CNBC Make It. "So at some point, it may make sense to acknowledge that what we're doing now simply isn't working."
Trust the Process: What the Sixers have in Common with Successful Business Leaders (Philadelphia Business Journal, June 2018)
Three years ago on NBA draft day, we wrote an article about the Sixers’ strategy to win the long game. The struggling team found themselves mired in nearly a decade-long period of lousy performance. However, over the course of this near-historic losing skid, leaders of the Sixers organization remained immune to short-term pressure for quick fixes, and laid out a bold plan with long-term strategic intent. Three years later, in the midst of executing drastic transformation, the Sixers are now a winning team and a legitimate NBA-title contender.
Our research at Heidrick Consulting has documented the capabilities of winning organizations and their recipes for success. There are close comparisons that can be drawn between the 76ers and the world’s best companies that we deem “superaccelerators.” Namely, both the Sixers and superaccelerating organizations, such as Alphabet, Celgene, Comcast, and Visa, have demonstrated an exceptional ability to mobilize, execute, and transform with agility.
They Overcame the “Valley of Despair” with a Clear Purpose (Mobilize)
In a volatile and hyper-competitive environment, organizations and teams need to adapt and institute internal change. There is a robust empirical phenomenon termed the “Valley of Despair.” During organizational change, performance typically declines before it improves. When performance reaches a low point, there is a sense of fear and doubt that pervades organizations. At this point, many employees may disconnect from the change, causing the organization to fail – unless there is a clear and compelling North Star. The North Star will give the organization will to stay the course and survive the inevitable valleys of despair that accompany change initiatives. The Valley of Despair can be seen both in the history of businesses and in the 76ers’ quest to rebuild.
Three years ago, the Sixers finished with 18 regular season wins, making them the third-losingest team in the NBA. Things got worse before they got better. The next season, the Sixers won 10 games, putting them dead last in the league, and nearly setting an NBA record for futility. But in the midst of poor performance, meager crowds, and General Manager Sam Hinkie’s departure, the Sixers organization held a clear North Star, utilizing their young talent and draft picks to make them an NBA title contender. They continued to take a patient approach to the injuries of key players such as Joel Embiid, and stockpile draft picks that would produce 2018 Rookie of the Year nominee Ben Simmons. They took calculated risks, such as trading their 2014 1st round draft pick for Dario Saric, who was playing in Turkey at the time. Now the Sixers’ vision is starting to pay off. This year, the Sixers finished with the fifth best record in the NBA.
They Put the Right People in the Right Roles (Execute)
Organizations develop winning capabilities through great talent-development processes. Execution implies making difficult decisions on individuals who are not the right fit for the role and organizational culture. Such critical decision-making should be exercised for all levels of the organization – from front-line talent to upper management and executives. The Sixers invested considerable time and capital in finding the right players for the right roles. In 2017, they invested $148 million in Embiid’s new contract as their franchise center. Shortly after, they traded former 1st round pick Jahlil Okafor after a growing list of off-court issues and disputes with coaches. This season, they invested in strong perimeter shooting through JJ Redick, and bolstering their bench talent. And in the offseason, after concerns that General Manager Bryan Colangelo leaked sensitive information about his players, the 76ers have accepted Colangelo’s resignation in favor of a replacement who will have better relationships and trust with players and fans. The Sixers’ ownership has demonstrated an ability to make tough calls and remain resilient in the face of adversity.
They Drive Innovation and Model an Entrepreneurial Spirit (Transform)
Winning organizations challenge the status quo. Leaders within these organizations should encourage and drive experimentation to reinvent their businesses ahead of the competition. Transformation implies breaking with tradition and internal fiefdoms, rethinking the way things are done, and embracing innovation. This requires a culture of disruptive thinking, idea generation, experimentation, and rapid adoption.
The 76ers were named to Fast Company’s 2018 “Most Innovative Companies” list due to their breakthroughs off-the-court. The Sixers’ new, state-of-the-art Training Complex in Camden, New Jersey is unparalleled in size and scope in the NBA. The Sixers also provide their players with a premier nutrition program that surpasses that of many of their NBA competitors. They hired an executive chef, JaeHee Cho a former sous chef at Parc – a high-profile Philadelphia French restaurant – who created a restaurant-quality menu serving the nutritional needs of top athletes.
They Maintained Optionality while Executing their Strategy (Agility)
Too often, leaders and organizations become entrapped in the frame of binary decision-making. Strategic thinkers insist on surfacing multiple options at the outset and do not prematurely become locked into go/no-go decisions. Winning organizations can pivot their strategies in the event of unforeseen change.
While executing in their quest to build a championship-caliber team, the Sixers maintained salary cap flexibility and a healthy stock of draft picks. Before the start of the 2017-18 season, the Sixers were able to sign Redick for a one-year, $23 million deal. Redick was instrumental in helping the Sixers make the playoffs, with his ability to shoot from the perimeter and mentor young players. The Sixers’ current payroll structure has positioned them as a viable suitor for LeBron James’s free-agency, and also a potential acquirer of Kawhi Leonard or Paul George. Furthermore, the Sixers own six draft picks in this year’s draft, with one of those picks being the 10th overall pick from the Los Angeles Lakers.
The Sixers are modeling the disciplines of strategic leaders and winning organizations. In addition to the aforementioned characteristics, the 76ers have demonstrated many of the 13 drive factors that our research has proven to differentiate the best-performing companies from the status-quo. And although the current generation of players and management have yet to produce an NBA title, the Sixers opened Las Vegas bets with the best odds in the Eastern Conference to win the 2019 NBA Finals. Regardless of their fortune and our own fandom, the Sixers represent a paradigm from which businesses can learn.
Some of the concepts and examples in this article were adapted from “Winning the Long Game: How Strategic Leaders Shape the Future” by Steven Krupp and Paul J.H. Schoemaker (PublicAffairs, 2014) and “Accelerating Performance: How Organizations Can Mobilize, Execute, and Transform with Agility” by Colin Price and Sharon Toye (Wiley, 2017).
How can women’s sports become mainstream?
While it’s never been a better time to be a female athlete, and participation in sport from women of all ages is on the rise, the one key area where we’re seriously lacking in is corporate investment. The most recent estimate of global corporate investment currently stands at 0.4% for women’s sports, with the majority of the rest of that figure going to the men.
This needs to change, and to achieve this we - that includes government, the media, people in business and you, dear reader - have to be pulling in the right direction. We have to educate potential investors and tell the story of the benefits of women sport better. Here’s my topline take on how.
1. We need to identify and empower female athletes - for the right reasons
The #WhatIf campaign by Women in Football, which launched last month, is a great start when it comes to empowering women’s sports for the right reasons. In a nutshell, businesses such as Betfair, Sky Sports and Barclays have pledged to invest in boosting the profile of women, working in the football industry.
#WhatIf also highlights how we need initiatives like this across the whole gamut of women’s sports, and for reasons that go beyond mere tokenism. These businesses have invested in the Women in Football initiative based on individual achievements and performance, not just their gender.
We need to start championing more sportswomen from a host of different sports because they excel at their game - like kickboxer Ruqsana Bequm and footballers like Sydney Leroux. Female sport stars can generate loyal and avid fanbases, so if we can boost their exposure, we can create a compelling desirable option for businesses to spend sponsorship money with them based on both the quality of their performance and their ability to generate engaged fans, beyond a token gesture.
2. We need to look beyond reach to attract more corporate investment
Sponsorship plays a big part in funding grassroots engagement in sports, and without it, most sports will struggle.
That 0.4% statistic is shocking to say the least, and it highlights the disparity between the growing interest surrounding sportswomen, and the lack of investment in championing them.
The key issue is that businesses look at men’s and women’s sports in the same way. It’s about how many eyeballs - in stadia and on TV’s - they can reach with their sponsorship money. This is disingenuous - while the popularity of women’s sports is on the increase, it’s never going to match the same number of viewers as its male counterparts.
This might be a bitter pill to swallow, but it shouldn’t matter that women’s sports attract fewer viewers. The point is that backing female sports goes beyond how many people see your logo on TV; it’s much more about who’s watching and engaging with the game and how they subsequently feel about the backing a particular business gives to that sport. Brands such as SSE, Vitality and Kia, who are already engaged with women’s games, have spoken about how they’re viewed in a positive light from audiences at games, which has turned into increased brand-love and affinity.
3. We need to sell women’s sport on the basis of engagement and participation
One of the main reasons for the groundswell of interest around women’s sports lies in the fact that they’re viewed as being more inclusive. Men’s football and rugby games are a pleasure to watch. But fans can be too loud and/or rude for families, who don’t appreciate their kids learning a lexicon of swear words to tell the ref he’s made a bad decision.
That’s partly why we’re seeing more families attend female sporting events. They’re slowly becoming the natural home for family audiences, and they may even succeed in bringing on board people who wouldn’t naturally watch sport.
But not only do these games attract a different audience, and therefore, different brands backing them, female athletes have also been shown to appeal to fans in different ways. They’re seen as more likeable and appealing - for example, during this year’s Winter Olympics, a study found that Team USA’s sportswomen drove more social media engagements per athlete than the sportsmen.
So while it’s never been a better time to be a female athlete, the commercial future can be much brighter. Women’s sports deserves to be in the mainstream. But it’s only through continued investment - which we can achieve if we market female sports in the right way, by focusing on the above three points - that we’ll keep growing the female game, and continue to raise the bar.
Unrealized Potential: The High Cost of Gender Inequality in Earnings is the first in a series of reports that aim to measure the global economic costs of gender inequality. This first report measures these losses in lifetime earnings.
In many countries, girls’ average educational attainment remains lower than boys and adult women are less literate than men. Apart from these gender gaps in educational attainment, discrimination and social norms shape the terms of female labor force participation. Women are less likely than men to join the labor force and to work for pay. When they do, they are more likely to work part-time, in the informal sector, or in occupations that have lower pay. These disadvantages translate into substantial gender gaps in earnings, which in turn decrease women’s bargaining power and voice.
In addition, many girls are married or have children before the age of 18, before they may be physically and emotionally ready to become wives and mothers. Women and girls also face higher risks of gender-based violence in their homes, at work, and in public spaces. Their voice and agency is often lower than that of males, whether this is within the household, at work, or in national institutions. This also affects their children. For example, children of young and poorly educated mothers often face higher risks of dying by age five, being malnourished, and doing poorly in school. Fundamentally, gender inequality disempowers women and girls in ways that deprive them of their basic human rights.
This lack of opportunities for girls and women entails large economic costs not only for them, but also for their households and countries. Achieving gender equality would have dramatic benefits for women and girls’ welfare and agency. This, in turn, would greatly benefit their households and communities, and help countries reach their full development potential. It would reduce fertility in countries with high population growth, as well as reduce under-five mortality and stunting, thereby contributing to ushering the demographic transition and the associated benefits from the demographic dividend.
Some key findings: