The following blog post is the second of a two-part series on the benefit of female representation in boardrooms based on the qualitative findings from an interview-based study of 103 corporate directors conducted by the Better Boards Initiative.

To build on our research in the current political climate, I spoke with two seasoned directors and Chairs who have watched their many boards evolve from when they were the lone woman in the room.  I asked them two questions: 1) What difference have they seen women make on their boards as others have joined them; and 2) What is one best practice they see related to diversity.

Phyllis Campbell

Q: How have women changed your boards?

It’s just markedly different from when I first joined boards when I tended to be the only woman in the room.  My opinion and my thoughts would get no support at the board table, get no traction, and would tend to get ignored.  Then I’d have to come back again and say, wait a minute, I feel like I need to raise this again.  Didn’t get a lot of head nods, just those blank stares.

Today companies live more than ever in a glass house and so the risk management sides of things are critically important.  I see diverse board members bringing the questions of ‘what happens if…?’  They might say, for example, ‘In my experience, this could be a risk with certain populations if we go out with this ad campaign.’  These kinds of questions only come up because you have different thinkers at the table.  I will say that it’s hard sometimes to get traction because people tend to be dismissive. “Oh, we’ve thought about that.  It’s not a problem.” 

But I’ve seen people raise just the ‘what if’ questions to demonstrate that there’s a risk to stepping out.  For example, any acquisition today is getting a lot of political pushback – scrutiny from the (U.S.) Department of Justice, from regulators, and from diverse board members.  In one case, those who have had political and government experience have raised questions, saying, ‘You know, just because we think this is a great thing to do for our shareholders and this looks like it makes sense from a business standpoint, we can’t assume that regulators are going to accept this and say, ‘This is good for society and for consumers.’  We need to understand the regulatory environment and do a ‘what if?’  ‘What if the Department of Justice rules against this?’  ‘What if the Federal Trade Commission doesn’t think this is a good idea?’  ‘What if the EU rules against it?’  ‘What if there is a two-year delay in getting approvals, would this still be a good thing to do?’  In my experiences, diverse board members have different experiences and raise those questions that previously haven’t been raised at board tables.  They slow things down…but it’s a good idea to slow things down sometimes.

Q: What are some best practices in the current environment?

Through the 2024 election, DEI is going to become even more a part of the political conversation.  It’s important for companies not to shrink back, but to sharpen their focus on DEI. It seems obvious that we want a diverse set of people so that we can have a diverse set of thinking whether it’s on our boards or with our executive teams. 

1. Number one, we need to take a much more strategic view of why this is important. 
2. Number two, it’s important to involve the board in conversations about the pushback so if we are targeted we are anchoring DEI in the company’s DNA and tied to strategy, and making sure the board is involved, if pushback comes, in filtering through it  If there’s a reputational consequence, how does the board actually get involved and help management think through the position the company either does or does not take?

One example she draws upon is her experience with the Toyota North America Diversity Advisory board, serving a Japanese company with customers in North America and based in Texas. 

There were certainly certain initiatives that were questioned relative to diversity.  The company used the board to really think the issues through, putting principles first, putting culture and strategy first, saying ‘How should we think about this? How should we respond?’  ‘What kinds of consequences would there be?’ And so the board took a really proactive role in helping the company think through its responses to various issues that came up politically. 

There are more reasons today than ever before to involve boards in these discussions. The best practices I’ve seen use the principle of consistency.  If you have a strong LGBTQ+ position, for example, stick to your principles.  Don’t waver.  Honor stances that the company has taken in the past and don’t appear to waffle.  I think the company can, under the umbrella of DEI, anchor in core principles – what the company stands for, culture, what the company has actually been known for. 

1. Number one, use principles as your filter for decisions, number one. 
2. Number two, the board can also be a check and balance on how vocal to be on an issue.  There’s certainly a way to approach something as a response and a way not to.  The board can be a filter on what reactions we might get if we, for example, took an Op-Ed out in the extreme challenge to a politician publicly and provide a little bit of a check and balance with any decision management might make.  How does the board actually filter through with management these kinds of decisions on stances that might be less than popular with certain constituencies?

Beyond just the political divide and polarization within this country, companies are finally coming around to seeing the value of diversity and inclusion on their boards and seeing a clearer link now than ever to innovative and flexible thinking.  Just making sure there’s a real culture of respect, of bringing different opinions to the board table in particular.  I actually think we’ve come a long ways in the last couple of years and seeing boards that are more diverse, particularly relative to gender, better on ethnic diversity, and a little better on age diversity.  Most sitting board members I talk to say, ‘I get it.  I understand why diversity and inclusion matter to our board table and to the company because I see a difference in our thinking.  I do see that some innovation has resulted and some risk – questions that have come up that we have not considered before.  It’s that whole environment of flexible thinking and innovative thinking and different thinking that has been acknowledged as a real competitive advantage.

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Anna Catalano

Q: What difference have women made to boards?

I think boards ended up getting more than they realized.  We ask very different questions.  We’re not afraid to ask some questions.  It’s not uncool to ask questions about how people are feeling during a pandemic.  There are some expected differences and some unexpected differences.

Q: What do you think has been the most unexpected difference?

That we are as tough on performance and results as the men are.  That we’re not afraid of asking difficult questions.  There’s an image that women don’t like conflict.  Yet I have found in many ways that we’re better at it than a lot of men are.  Sometimes they’re surprised that we’re willing to tackle an issue head-on.

Board meetings today tend to be less about past performance and the rearview mirror and much more about the future and strategy.  Diversity has brought a much richer conversation to the strategic dialogue. 

When people come from different backgrounds, we have experienced different things. People always say, “Well, diversity, you can have diversity in a lot of different ways. You have two white men that are very diverse because of their experience.” I said, “Absolutely, you can.” I said, “But the likelihood of people who look different having different experiences is far greater than people who look the same.” I’m not saying you have to look different to have a different experience. In fact, there are some people who look different and have the same experience. But if you’re a woman versus a man, I guarantee you I have gone through different things than you have. Therefore, when it comes to the strategic conversation, there are different things we can offer.

the other thing that we do is we can see and we are willing to call out unconscious bias much more. I’ll give you a story.  On one of my manufacturing boards a couple of years ago, we went through a talent review where we’re talking about who’s in line to be in certain positions down the road. This was a manufacturing role for one of the manufacturing plants. This company had five manufacturing plants.

They reviewed a list of future leaders, and there were no women on the list. I asked the question, Are there no women that are qualified to run the plants? The person who was presenting said, “There is one woman.” And he gave me her name. He said, “She’s very good, but she’s got a family and she probably wouldn’t want to work the hours.” I said, “Oh, I see. I understand.” I said, “It’s amazing to me that none of these men have families.” You could have heard a pin drop in the room.

I not only figured out what the problem was, but I was willing to call it out and call it out in a way that wasn’t confrontative. I wasn’t confrontative. But I called out in a way that made them stop and think about their bias. Because as much as they had a bias about a woman not wanting it, they also had a bias that all men would. That, I think, is an equally flawed assumption that a man doesn’t get to say no because they’ve got a family situation.

A lot of men have told me one of the best things that’s ever happened to the workforce is having women come in because they now have permission to attend their kids’ soccer games.

Q: What are best practices in the current environment?

One best practice is voluntary on-board refreshment.  One of the hardest things boards have to do is ask directors to leave. Part of the answer is for directors to recognize it’s time to step down on their own to make it easy.

Something I did a year and a half ago was step down from a large cap board after 16 years – because I decided I’d been on for too long. Other directors had been on the board for over 20 years. But even though I had gone through four CEOs, one huge merger, one failed merger, the company had changed a lot. I just decided it was time for me to step down and for new people to come on. I think a director voluntarily recognizing that is something that should be done more often. People ask me, ‘Why would you ever step down from a large cap board?’ I said, ‘Because it’s time and new skills and fresh thinking are needed.’

Another best practice is individual director evaluations. Actually, I just kicked this off on a board that I chair, a nonprofit board that I chair for NACD. 

At the end of the term, directors have an opportunity to renew or to not renew. We decided for all the directors that are renewing their terms, we will start having director evaluations where the other directors get to communicate how they feel this director has contributed. We’re going to let directors know here’s what they’re going to be evaluated on, giving them an opportunity to really think about, is this something that I actually have time to do and I want to give time to? I think having individual director evaluations is a best practice.

Q: What percentage of boards have individual director evaluations?

Very small. I’ve served on 12 public boards. I’ve only had two boards that did individual director evaluations that the Chair would turn around and give you your feedback.

One was done every year, and it was quite a lot of work. But the Chair of that called me every year to say, ‘Here are the things that people really like about you contributing. Here’s your attendance for the last year.’ Obviously, staff folks did a lot of background work, but he took all the input, which was really great. If there was anything, he said, ‘Here are things that they’d like you to do less of or more of,’ things like that, which is great.

Q: How in-depth are these individual evaluations?

Not 50 questions, but a few questions like, Does this director show up prepared? Do they show up? A real important question is, does this director possess the skills that this company needs in its current strategic journey? The answer to that sometimes is no. Because companies go through many different chapters. Sometimes companies go through a chapter where they need different skills. It’s a great way for directors to recognize that it’s not because they’re not good, it’s because a different set of skills is needed.

Another best practice is a skills matrix of directors.  It’s a  pretty common practice now.  But do  most companies use what they have? Because I know of companies that have a skills matrix, but still when it comes time to fill a board seat, it’s ‘who do you know?’ That’s an issue, and that’s a reflection of the Nominations and Governance Chair.

Q: One of the best practices we found in our research is cultivating a culture of respect.  How have your boards done that?

That’s tremendously important, especially when companies go through difficult times. One way you ensure a culture of respect is to make sure everybody understands why people are on the board and what their skills are. As you bring people on, make sure people understand. The more you use the skills matrix, it just helps lead to a culture of respect where people understand the reason why everybody’s on. I think a lot of the respect happens because of one of your other five areas, which is leadership. How does the board Chair or the Lead Independent make sure everyone is heard? Make sure you don’t have a faction that really gets stuff done and other people just show up and are marginalized. It’s really important not to have that.

Q: You make sure everyone understands why someone would be on the board. How does one go about making sure everybody understands?

Part of it is, how do you describe yourself in a proxy?  One of the real important things that investors want to know these days is why is this the best group of people on this board of this company?

Rather than just having a off-the-shelf bio that you might use for a speaking engagement. I think it’s actually important in proxies for companies to state why is Anna on this board? What is it about her background that makes her uniquely valuable to this company as a director? That’s very different than a bio that might include a list of past achievements that all of us have, right? It’s about what is the voice she brings to the table. I think that’s important for investors. I think it’s important for employees. I think it’s important to all stakeholders, and certainly to your investors and shareholders.

Q: Do your companies, your current companies, Anna, do they do that?

You know what? Some do, and after today’s meeting, it’s on my to-do list. I am going to really pay attention to proxy bios this coming year because we’re moving into proxy season soon. We’re going to be writing these in the first quarter next year. I’m actually really going to focus on that because I think it’s important.

Q: Can you give an example? This is really fascinating. Can you give an example of how your proxy bio might be different than your professional bio?

There’s a lot of financial experts out there. For a lot of financial experts, their bio reads something like, a former CFO of some company or whatever. I think it’s important if a person is on the board of a company going through a lot of mergers and acquisitions for that bio to say, “This person has had significant experience in mergers and acquisitions, financial aspects of mergers and acquisitions. Getting more strategically relevant descriptions of our backgrounds is what is important, if that makes sense.

There are people who are uniquely qualified because they’ve managed huge P&L businesses. My experience in building a business in China years ago and my understanding of Chinese culture could be something that people want to focus on in any write-up. It’s not just listing the jobs I had, but saying it in a way that helps the reader understand the relevance and why that’s an important voice in the boardroom. What investors need to know is that they are confident that this group of people are the right 9 or 10 or 11 people serving as board directors. Why are they there? Why would they be better than other people?