Women on Boards: The Benefits of Inclusive Leadership and Gender Diversity

Shifting demographics, investor pressure, and a growing recognition of the positive impact of inclusive leadership have increased the focus on diversity in the C-suite and on U.S. public company boards. According to Price Waterhouse Coopers (PWC) 2018 Annual Corporate Directors Survey, nearly 95% of directors agree that diversity brings unique perspectives to the boardroom and 84% believe it enhances board performance. Benefits of Gender Diversity
While most CEOs recognize the importance of appointing directors of different ages and with varied educational backgrounds and functional knowledge, they tend to underestimate the benefits of gender diversity.
Companies with more women directors:
Report higher returns, operational performance, share price
Deal more effectively with risk
Tend to better address the concerns of customers, employees, shareholders and the local community
In a world where women drive 70-80% of all consumer purchasing through a combination of buying power and influence, it makes sense to include female voices and ideas in the board room. According to Harvard Business Review, women:
Are likely to be more in tune with women’s needs, which contributes to the development of successful products and services
Are more persistent than men in pursuing answers to difficult questions
Tend to bring a more collaborative approach to leadership, which improves communication among directors and between the board and management
May serve as positive role models to female employees, improving performance and corporate reputation
Current State of Women on Boards
In 2018, 38.6% of the Fortune 100’s board seats – and 34 percent of the Fortune 500’s board seats – were held by women and minorities. By 2024, the number of women and minorities on Fortune 100 and 500 boards could increase to 40 percent.
From 2016 to 2018, the diversity of Fortune 500 boards has increased:
26.2% increase in African American women board members
9.8% increase in Hispanic women board members
38.6% increase in Asian/Pacific Islander women board members
But there is still room for improvement. According to the 2020 Women on Boards 2018 Gender Diversity Index, half of the companies on the Russell 3000 still have one or no women on their boards.
Bridging the Gap
For women who are interested in finding board opportunities, here are a few things you can do to advance your candidacy:
Expand your network. Personal connections are among the most important ways to facilitate a board position.
Participate in trade and professional associations. You may also want to join organizations that recruit women to sit on boards.
Polish your professional profile. Create a customized board resume and promote yourself by speaking at professional meetings or offering yourself as a subject matter expert to business or trade publications.
Whether you’re thinking of it as a way to advance your career, give back, or bridge to retirement, serving as a board member is your opportunity to have a long-term impact on the future of an organization that is meaningful to you.
Brian Jacobs is a Wealth Advisor in Valencia, CA at Morgan Stanley Smith Barney LLC (“Morgan Stanley”). He can be reached by email at brian.jacobs@morganstanley.com] or by telephone at (661)290-2022.
Information contained herein has been obtained from sources considered to be reliable. Morgan Stanley Smith Barney LLC does not guarantee their accuracy or completeness. Brian Jacobs may only transact business, follow-up with individualized responses, or render personalized investment advice for compensation, in states where he is registered or excluded or exempted from registration,
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