Posted on 6/1/2010

On February 11th 2009 the Washington Post published an article entitled "In Banking Crisis, Guys Get the Blame", which provides an overview of a "gender revolution" that is taking place (particularly in Europe) in order to increase the number of women on the management teams and boards of directors of financial institutions. Quoting several studies, the author argues that greater gender diversity in an industry "long controlled by men" might have gone some way to preventing (or lessening) the current financial crisis.

A link to the article can be found below however, here are some of the statistics:

- "In Britain, women count for just 12% of corporate directorships of companies on the FTSE 100 stock exchange index."

- "In the United States, women hold just 17% of the corporate directorships" and 2.5 % of the CEO posts "in the finance and insurance industries."

"In France...recently conducted a study that concluded that French companies with the greatest percentage of women in management have performed the best during the crisis."

In Banking Crisis, Guys Get the Blame

In January 2009, Bridge Partners LLC responded to an blog by Jim Naughton, Co-Editor of Harvard Law School's Corporate Governance blog, entitled "Women in the Boardroom and Their Impact on Governance and Performance", which drew some similar comparisons to the Washington Post piece. Below is a link to that article, as well as an extract from Bridge Partners LLC's response:

Women in the Boardroom.

From Bridge Partners LLC:

"The study conducted by Adams and Ferreira is an important contribution to the ongoing discussion of corporate governance and broad diversity (gender, ethnicity, international exposure, functional background, etc). While the study makes a very interesting correlation between gender diversity and either firm value or operating performance, this should not be seen as to diminish the basic business case for diversity on boards:

First, there is a strong case that good governance requires diversity, not just in relation to attendance and level of monitoring (both of which the article states increase with greater gender diversity), but also in relation to a more overarching level of accountability and responsibility to protect shareholder interests. The more uniform a corporate board is, the more likely its members will think and act the same, making them less likely to challenge the status quo.

Second, many institutional investor groups are now including the diversity of the board of directors as a desired "good governance" policy in that there is representation of the interests of all stakeholders (shareholders, customers, employees, suppliers, etc.).

Third, stakeholder groups (including investors, employees, consumers, suppliers, regulators, communities, and consumer advocacy and activist groups) require companies to contribute to broader societal goals as well as deliver bottom-line results. Therefore, if a company's Board of Directors illustrates a natural inclination towards inclusiveness of new ideas and approaches, it will experience a significant positive impact on the perception of the company as an employer and on the product/service it provides. All of which will ultimately be reflected in a company’s bottom-line.

As noted previously, diversity refers to more than gender alone. But gender is an important indicator and, upon reading the recent Wall Street Journal's Top 50 Women to Watch Out For, it is difficult to ignore the fact that the number of women serving on boards of directors is decreasing, despite employment gains for some high-powered professional women.

Given the clear business case for diversity on Boards, it is crucial for nominating committees and key stakeholders to encourage diversity and proactively seek a diverse range of potential board candidates."

Keywords: women, boards, director, directors, diversity, governance, banking, crisis, corporate, management