Women on Boards and in the C-Suite

Women on Boards and in the C-Suite:
Creating a Culture of Inclusivity and Meritocracy for Greater Diversity and Stronger Governance

by Danielle Thierry

By now, the business case for corporate board diversity is clear. Among other metrics, Fortune 500 companies with more women on their boards have been shown to perform better and enjoy greater financial success.[1]  

More recent data has shown equally powerful results for companies with women CEOs. An algorithmic analysis of the performance of Fortune 1000 companies with women CEOs vs. the S&P 500’s performance from 2002 to 2014 revealed that women CEOs in the Fortune 1000 drove triple the returns of the predominantly male-run S&P 500 companies.

A separate 2014 study by leading global financial services company Credit Suisse tracking 28,000 executives at 3,000 companies throughout 40 companies against those companies’ financial performance found a link between more female executives and financial performance (including higher returns on equity, higher valuations, better stock performance and higher dividend payouts). In fact, companies where women held the very top positions of CEO, head of a major business unit, and chief of finance or strategy—the positions known for exerting the most control over organizational decisions— performed markedly better.[2]

Despite this, the number of women in the C-suite remains small. In the Credit Suisse study, for example, women held just 17.5% of top financial or strategic jobs, 8.5% of business unit leadership positions and a mere 3.9% of CEO positions.[3]

Do more women in the boardroom translate to more women in the C-suite?

Given that one of the primary responsibilities of corporate boards is planning for CEO succession, one avenue to moving more women into CEO and other top executive positions may be to bring more women into the boardroom.

In 2008, nonprofit research organization Catalyst released an analysis of the relationship between 359 Fortune 500 companies’ percentage of women board directors in 2001 and those same companies’ percentage of women corporate officers in 2006. The report revealed a clear and positive correlation, with companies ranked in the top quartile for percentage of women board directors in 2001 having 33% more women corporate officers five years later than companies in the bottom quartile.[4] A separate 2011 paper from the RAND Corporation, which looked at US corporations between 1997 and 2009, found that those with more women on their boards one year tended to have more female top executives the next.[5] More specifically, the Catalyst analysis found that women board directors had a greater effect on increasing the percentage of line positions involving profit-and-loss (P&L) responsibility held by women—a responsibility considered key as experience for advancing into the top tiers of leadership.4

Recent data from Nordic countries where board quotas for women are law, however, present evidence that the correlation may not always hold true. According to a 2014 Wall Street Journal article, despite Norway’s quota requiring 40% of public company board members to be women, not one of the country’s 32 large-cap companies is led by a woman and a mere 5.8% of general managers at public companies are women.[6]

A 2014 study on the effect of board quotes in Norway further found that although quotas have appeared to have resulted in some positives—chief among them a rise in highly qualified female board members and a substantial reduction in the gender gap between pay among board members—it has not appeared to have a broader impact among women in the workforce. The study found no statistically significant changes in overall gender wage gaps, female representation in executive leadership or the talent pipeline of women.[7]

Diversity in leadership is about changing the culture

The takeaway from these conflicting stories may be this: it’s not just about the numbers. Increasing the number of women on corporate boards is a positive step, but it must be paired with a true shift toward inclusiveness that starts at the top.

“The chairman and the CEO set the tone of the company,” says Cathy Sohn, PharmD, the HBA’s 2003 Woman of the Year (WOTY) whose extensive board service includes current roles as chair of the nominating/governance committees for Jazz Pharmaceuticals and Neuralstem, Inc. “The Compensation Committee is also particularly active in reviewing succession planning, whether for the CEO or the CEO’s direct reports, and that’s where I think the board can be encouraging and supportive of women whom they have visibility of and asking about women who may not be as visible.”

Annalisa Jenkins, MBBS, MRCP, CEO of Dimension Therapeutics, 2014 HBA WOTY, and member of industry boards including those of Biomarin Pharmaceuticals and Biothera Pharmaceutical, Inc., agrees. “Creating diversity at the top that ensures a culture of innovation, excellence and true meritocracy through the organization will significantly enable and accelerate the opportunities for women at all levels in the workforce,” she says. “Increasingly women want to look up at their leadership and see role models and broad diverse representation. It is what will attract them, keep them and thus differentiate the company.” Jenkins adds that great boards—often led by great men—recognize the need to proactively ask for diverse slates and to ensure the selection process is based upon technical qualifications and leadership skills that will enhance the ability of the board to grow to the next level.

The push for diversity drives a positive shift in governance overall

Diversity efforts and oversight—and the meritocracy they help to create—may also be creating better boards in general.

Julie Suk, a law professor at the Benjamin N. Cardozo School of Law at Yeshiva University, recently wrote in The New York Times of how corporate board gender quotas in France have led to stronger boards and improved corporate governance in companies throughout the country. These quotas, she says, “disrupt path-dependencies in corporate governance.” The need to search for more female candidates, she reports, led to a call for more public articulation of the necessary qualifications of board members and a greater scrutiny of corporate governance as a whole.[8]

“The reason many boards have the makeup they do is because when it comes time to find a new board member, they tend to reach out to the people they know, the people in their circles who happen to be like them,” says Charlotte Sibley, MBA, president of Sibley Associates, LLC and the 2008 HBA WOTY who serves on the nominating/governance and strategic planning committees of Taconic Biosciences, Inc. among other board positions. She points to data from the pricewaterhousecoopers 2012 Annual Corporate Directors Survey, in which 90.7% of board members said they used their fellow board members’ recommendations to recruit new professionals to the board.[9] “So I think that by putting quotas or diversity oversight in, this really does disrupt that trend because you have to say, ‘Okay, what are we looking for in a board member?” As Taconic’s chair of nominating governance for the board of directors, Sibley says prior to looking for their next board member, she took her board through a process of asking critical questions around board function, gaps, training and onboarding needs in order to ensure that the new appointee truly met the board’s needs.

Anne Shehab, PhD, MBA, president and CEO at GI Supply and board observer for Respiratory Motion Inc and Saladax Biomedical agrees and says that skilled leadership is more important than ever as boards become more involved in business strategy. “It's difficult to understand what's going on in the company just by going to four board meetings a year. You really have to dig in, and you have to know what to look for, and you have to spend time learning about the company,” Shehab explains.  “So anything that can be done to increase the quality of board members and ensure they bring the necessary set of qualifications to the boardroom is hugely helpful. This also opens up the door to a lot more people who have those skills, women included, who can now compete for those positions.”

Women CEOs can also help to open the door to more women on boards

Not only can women board members help to bring more women to the C-suite and strengthen the culture of inclusiveness and meritocracy; the inverse can be true as well.

A Wall Street Journal article recently shared that approximately 54% of the 67 S&P 1500 companies with a female CEO now have at least three women on their boards—compared with just 15.5% of those led by a male CEO. The article goes on to report that some female CEOs say they actively seek other women for board roles, ensure that women are on the slate for consideration, and broaden the field of potential candidates.[10]

This last one is key. Catalyst’s 2013 report on high potential board candidates showed that while there were no differences in women’s and men’s aspirations to serve on boards, men were more likely to have access to what have long been considered the “right” kind of jobs to make them board-ready (ie, people management, senior executive status and P&L experience).[11]

Now, however, many female CEOs are getting creative about finding qualified women for their boards, even if they don’t fit the typical picture of a board candidate. This has opened the door for women with in-demand expertise such as digital experience.10


10 steps to putting yourself in a position to serve on a public board

“The first public board of directors role is the most difficult to land,” says Jenkins. “But once you have the opportunity to be part of a great board of directors and to help a great team you build a reputation and it moves ahead from there to so many other interesting and exciting opportunities.”

So how does one get on that first board?

1.  Identify your skillset: Senior level executive experience in strategy, regulatory and risk, finance, and governance are all key.

“Today, boards are engaged in refining and shaping strategy to a much greater extent than in the past,” adds Sohn. “Corporate boards, especially for small and midsize companies, are looking for pharmaceutical industry executives who have commercial operating experience.”

But don’t get discouraged if you’re not a top executive. “A lot of women think they’re not ready or suitable for boards, that they don’t have the background,” says Sibley. “But that’s not true because it’s not just the C-suite. I was not in the C-suite. I brought a commercial background, a research, marketing and strategy background and that was desirable to companies.”

2. Find ways to fill in any experience gaps: “It’s important to get operational and P&L experience because on the board, you’re responsible for oversight of strategy and finance,” says Sohn. “You have to be financially literate and be able to understand the financial statements and the capital allocation decisions that a board must make.”

3. Develop a track record of innovative ideas: “You have to be able to articulate what is the special expertise you bring,” Sohn explains. “Whether it’s being responsible for a series of successful turnarounds of products or regions that were in trouble or leading product development and commercial launches, or building new businesses, these are the types of special expertise that a board might be looking for if they are looking for candidates beyond a current CEO or CFO.”
4. Get a strong grasp of what board service means: Sibley suggests doing your research, both by talking to others who are already serving on boards about their experiences as well as by joining groups such as The International Women’s Business Leadership Association and the National Association of Corporate Directors.

Serving on a nonprofit board, particularly in a position of leadership, can also help. Being part of a well-run nonprofit board can help you to learn the principles of good board governance.

 5. Gain visibility as an expert: Sibley recommends using your nonprofit board service on organizational nonprofit boards like the HBA’s as a platform through which to get noticed by corporate board recruiters. “If you write articles, speak at conferences and serve on nonprofit boards, you can get on the radar screen of the recruiters,” she notes.

6. Let others see how you would serve: “Network widely as an executive before you’re looking for a board role,” suggests Sohn. “Chemistry on a board, how board members get along, is very important to being an effective board. So if you can interact with people through industry trade associations or committees, you’ll become known to people outside of your company. As people see how you collaborate with others on programs or projects, see how you bring up dissenting views and see how you help get to the resolution of key issues, those are all things that will make someone more comfortable in inviting or recommending you to a board.”

7. Make your desire to serve known: Tell people in your professional network that you want to serve on a board.  “Women are great at networking, but not at using their network,” says Shelia Ronning, founder and CEO of Women in the Boardroom. “You also need to be specific on the types of boards you seeking to serve on.”

Sibley says that after expressing an interest in board service to industry peers, it wasn’t long before she received a call from someone who pointed her to an opportunity. A second board appointment was also sparked by someone in her network, who knew Sibley had the right skills and experience and invited her to interview for the position.

8. Create your board documents: Ronning recommends developing a board bio and professional profile as soon as you know you want to serve on a board. Have these documents ready, as an opportunity may come at any time

9. Become an investor: Shehab’s path to board service began when she joined the nonprofit organization Golden Seeds, an investment group focused on supporting women-led startups. Shehab says that investor groups often ask the lead investor in a company to serve on the board in order to relay the company’s strategy back to investors.

 10.Get a sponsor. Jenkins credits her professional sponsors, all of whom were men, for opening the door to both her executive roles and her first board position. Yet Catalyst’s High Potentials in the Pipeline report notes that although research has clearly shown the importance of sponsors in advancing careers, only 40% of professionals considered “high potentials” who aspired to board positions were being actively sponsored. This is a missed opportunity that experts highly recommend.


[1] The bottom line: Corporate performance and women’s representation on boards. Catalyst (2007). Available at: http://www.catalyst.org/system/files/The_Bottom_Line_Corporate_Performance_and_Womens_Representation_on_Boards.pdf 

[2] Wechsler, Pat. Women-led companies perform three times better than the S&P 500. Fortune (March 3, 2015). Available at: http://fortune.com/2015/03/03/women-led-companies-perform-three-times-better-than-the-sp-500/

[3] McGregor, Jena. More women at the top, higher returns. The Washington Post (September 24, 2014). Available at: https://www.washingtonpost.com/news/on-leadership/wp/2014/09/24/more-women-at-the-top-higher-returns/

[4] Joy L. Advancing women leaders: The connection between women board directors and women corporate officers. Catalyst (2008). Available at: http://www.catalyst.org/system/files/Advancing_Women_Leaders_The_Connection_Between_Women_Board_Directors_and_Women_Corporate_Officers_0.pdf

[5] Matsa DA and Miller AR. Chipping away at the glass ceiling: Gender spillovers in corporate leadership. RAND Labor and Population working paper series (January 2011). Available at: http://www.rand.org/content/dam/rand/pubs/working_papers/2011/RAND_WR842.pdf

[6] Zander C. Even Scandinavia has a CEO gender gap. The Wall Street Journal (May 21, 2014). Available at: http://www.wsj.com/news/articles/SB10001424052702303980004579576074106113980

[7] Bertran M et al. Breaking the glass ceiling? The effect of board quotas on female labor market outcomes in Norway. National Bureau of Economic Research Working Paper No. 20256 (June 2014). Available at: http://www.nber.org/papers/w20256

[8] Suk J. A way to legitimize corporate governance. The New York Times (April 1, 2015). Available at: http://www.nytimes.com/roomfordebate/2015/04/01/the-effect-of-women-on-corporate-boards/a-way-to-legitimize-corporate-governance

[9] Insights from the boardroom 2012: Board evolution: Progress made, yet challenges persist. PwC’s annual corporate directors survey (2012). Available at: http://www.pwc.com/us/en/corporate-governance/annual-corporate-directors-survey/assets/pdf/pwc-annual-corporate-directors-survey.pdf

[10] Lublin, JS. Female CEOs make room for female directors. The Wall Street Journal (November 11, 2014). Available at: http://www.wsj.com/articles/female-ceos-make-room-for-female-directors-1415732625

[11] Carter M et al. High potentials in the pipeline: On their way to the boardroom. Catalyst (2013). Available at: http://www.catalyst.org/system/files/high_potentials_in_the_pipeline_on_their_way_to_the_boardroom.pdf