Women on boards: more rhetoric

The board and business performance discourse has been maturing over the twelve months or so: beyond various "blunt stick" theses that link certain structural and composition attributes of boards with improved business performance (women, board size, independent directors, CEO duality, et al), towards more general (and more subtle and far more complex) notions of diversity, behaviour and interactions in the boardroom. The maturing that has started to occur is welcome. Most of the time, when we don't understand something, we start by investigating the obvious (what we can see). Then, if answers are not forthcoming, we dig deeper. The maturing that I referred to in the opening sentence is the start of the digging deeper phase.

The discourse has evolved in recent months, as people have begun to realise that answers to social problems rarely involve inanimate constructs like percentages. However, the conversation took an unexpected turn this week, with the publication of this well-written article in the Washington Post. It picked up one of the blunt sticks that I thought had been put down. The rhetoric is laudable, and it may well sell newspapers, but the argument is somewhat misguided.

McGregor and Schulte's article starts by commenting on the percentage of US board seats occupied by women: 19.2 percent. So far so good. It's only when you read the article for a second or third time that the underlying (and unstated) thesis—that more women on corporate boards is good—becomes apparent. It may be, but I doubt that the presence of women in boardrooms per se is the answer to the question of how boards can or should influence business performance. Rather, women are far more likely to be a proxy for another underlying quality or social mechanism that cannot be spontaneously observed. A diversity of opinion and life experience, to enhance boardroom debates, is one likely possibility. However, we don't know that yet.

More research is needed, including longitudinal studies of what actually occurs in boardrooms (silent observation), to identify the underlying qualities of directors, social mechanisms and tasks completed by boards that, importantly, actually make a difference to business performance in certain circumstances. Then, and probably only then, will the rhetoric start to gain substance amongst directors and the wider community. In the meantime, articles like those written by McGregor and Schulte need to be consigned to the cutting room floor, so that there is plenty of space available for articles that dig deeper.