Leadership is key to expanding diversity on boards

Despite evidence supporting boardroom diversity as a driver of corporate performance, “the percentage of women directors on U.S. boards stagnated some years ago and remains at or near 12 percent, with fewer than 10 percent of boards having three or more women,” says Hillary A. Sale, JD, the Walter D. Coles professor of law at Washington University School of Law.

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“The pressure to add women directors is, however, growing.”

Hillary A. Sale, JD, the Walter D. Coles professor of law at Washington University School of Law. Washington University

Internationally, board diversity is regulated by quotas. “We are talking about quotas in the U.S. because other countries decided that quotas were the best way to make progress on board representation,” Sale says. “The real solution, of course, is leadership.”

Sale illustrates how achievable growth in boardroom diversity is.

“If every CEO and board chair in the Fortune 1000 sponsored one woman for a board position, we would soon have 1,000 more women on Fortune 1000 boards,” she says.

“The Fortune 1000 is just one index. There are many other existing boards, public and private, for which CEOs and others could sponsor women.”

Sale says the effect could yield a corporate landscape that is truly diverse, therefore reaping the benefit of a wide array of cultural and intellectual perspectives that provide the basis for innovation and growth.

Sale served as a panel member for Moving the Needle — the New York Stock Exchange (NYSE) Think Tank — where she and seven other key panelists, including Washington University in St. Louis Board of Trustees member Arnold Donald, gathered to discern and discuss leadership on board composition and the research surrounding the issues.

Think Tank moderator Maria Moats noted that there are just as many studies showing correlations between performance and diversity than those that do not. Discussion was initiated with the opening question many find critical to determine: “Does diversity drive corporate performance?”

Sale refers to a study that supports a correlation. “A recent study by the Credit Suisse Research Institute reveals that companies with women on their boards out-performed those without – in challenging markets,” she says.

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