Gender diversity is an item that finds ‘No admission’ stuck in its face at Indian boardrooms. This, despite the fact that it is one of the top five goals of the United Nations Sustainability that most Indian companies haveagreed verbally as critical. Only 17 per centof Nifty 500 board directorsare women. When will India meet with the regulatory mandateto have at least one female independent director in the top 1,000 companies? Not by 2020-21, for sure.
The majority of the 750-plus women directors on Nifty 500 boards now play serious roles with considerable professional expertise. A high proportion of women are in comp committees. Studies clearly say companies with more women leaders are 21 per cent more likely to outperform competitors and 27 per cent more likely to create better value. Yet, the pace at which the gender gap is closed in boardrooms is dismal.
Public sector companies have been worse than the private sector, just as we witness in governments. Just eight of the 71 PSUs in BSE500 have more than 20 per cent women – the criteria that SEBI has been trying to impose on. The worst is when it comes to chairperson roles: There are just 18 women (less than 4 per cent) as board chairs in Nifty 500 companies as on April 2020.
Interestingly, the needle is definitely bending when it comes to board gender diversity in the US. The latest Spencer Stuart Board Index finds that, for the first time, all S&P 500 companies’ boards have at least one female member. As many as 59 per cent of the new directors added by these firms in 2020 were women.This is good progress on board diversity, no doubt, but in one crucial aspect it remains limited – more women at the board table have not brought more women to the head of the table, just as we see it in India. There are only 30 or so independent female board chairs among the Fortune 500 and FTSE 100 combined list.
How did the women who chair boards beat the odds? What challenges do they face? What lessons can they offer to the new generation of lady directors? We asked a few board chairpersons for pearls of wisdom on getting on to, and succeeding in, board chair roles. Here are some of them for those few lucky women who are in board roles today.
A first step is gaining experience by chairing a committee, particularly a substantive committee like compensation or audit. That will come very handy when you are ready to take up a major role as a board chair. Remember that leading in a board, whether a committee or the board itself, is like leading from behind. As a chair, you are there to facilitate the board and support the enterprise strategy. And, learning how to do that is different from what you may have learnt as a CEO in another enterprise in the past.
After you have chaired a committee for a couple of yearsand when a chair(wo)manship opportunity comes up, be direct on wanting the role – you need to explicitly ask for it. Go to the other directors and seek their inputs and support. You have to be willing to listen and campaign with passion and conviction that you are ready for the role.
It is not an easy task to be a board chair unless you are doing it full time, so it is better to think about your availability first. If leading a board is a career choice, ensure that you have the time. Also, it is a good idea to have some exposure in multiple boards during your career to understanddifferent styles of leadership. People learn a lot from watching other chairs, the good and the bad. As a thumb rule, try to have five or six years of experience on boards before thinking of board chair roles.
The role of the board chair has to be one of ensuring that the board functions well, and that becomes your responsibility, as the chair
In the US, there is no fundamental difference between how the current generation of board members deals with a female and a male board chair. They are much more comfortable with women in leadership than previous generations. However, in India, this is not so. An assertive lady chair of a leading company has been alternatively branded as abrasive and high-handed.
However, things are slowly shifting. You still run across some of the old guard folks who have a hard time taking guidance from women. You have to be very aware of the situation culturally and work to get them comfortable with the idea.
The role of the board chair has to be one of ensuring that the board functions well, and that becomes your responsibility, as the chair. One thing that has changed over time is the pace at which you need to move. You have to be on your toes more and more to support the role of the board, especially in these times of remote meetings. You just can’t do a five-hour board meeting today as it used to before the pandemic.
It is wiser to spread the meeting over three days with 90 minutes or so duration.You will find that it is harder now to read the room in virtual meetings. As a chair, you may have to be a bit more procedural and formal to assure that everyone gets to contribute and be heard. Learn to ensure that everyone can participate, and as part of it, call on people in the meeting more often.
You don’t have to be nervous before leading your first board meeting as the chair – just be your authentic self as always. There is no need to do a lot of groundwork before chairing your first meeting. You got the role because the other directors already have confidence in you!