In one of the most comprehensive global surveys of corporate board directors to date, men and women directors were found to be in striking alignment on economic outlook, political and regulatory concerns, and the business challenges facing their companies - but differ sharply when it comes to board diversity.
Released today, the 2012 Board of Directors Survey - conducted by Women Corporate Directors (WCD), Heidrick&Struggles, Professor Boris Groysberg of the Harvard Business School, and researcher Deborah Bell - details the governance practices, strategic priorities, and views on their own boards' strengths and weaknesses of more than 1,000 directors from around the world.
"We see a remarkable consensus among men and women directors globally regarding the top 2012 political issues and the threat of increased regulation in this turbulent economy," said Susan Stautberg, co-founder and co-chair of Women Corporate Directors. "In fact, diving into the data, there was often greater distinction between U.S. and non-U.S. respondents than between men and women. But there is far less agreement from men and women in the area of board diversity. Women believe that board leaders must actively work to bring more women onto boards, while men see the lack of board diversity equally as a pipeline issue."
One area of agreement is in how men and women rate their personal strength - or lack thereof - in CEO succession planning. "Astonishingly, only 1% of women and zero percent of men rated succession planning as their strongest area of board expertise," said Bonnie Gwin, vice chairman and co-managing partner of Heidrick & Struggles' North American Board and CEO Practice. "Additionally, although finding the next generation of leadership is critical to the health and prosperity of an organization, only 40% of respondents globally said that their boards had an effective succession planning process for directors."
Researcher Deborah Bell emphasized the wide reach of this year's Board of Directors Survey: "With responses from 1,067 directors from 58 countries, this is the deepest and broadest exploration we have ever done into how boards think and how they operate," she said. "Given the global scale of our findings, the 2012 survey provides a highly in-depth assessment of what matters most to directors who are struggling to right the ship amid a sea of economic chaos."
Key Findings: Politics, Strategy, and Regulation
"Gender differences practically disappeared when we looked at how men and women directors think about issues like the economy," said Ms. Gwin. "These bottom-line business issues tend to allow for the greatest consensus in the boardroom."
"Despite the good intentions behind regulatory reform, board directors do not see increased regulation as the answer to the economic crisis," said Alison Winter, co-founder and co-chair of WCD. "Men and women directors are similarly concerned about the ability of Dodd-Frank to create better corporate governance - only about a quarter of both men and women respondents agreed that these regulations would result in better corporate governance."
Professor Groysberg underscored the importance of talent management to companies' long-term strategic goals: "Given that for many companies human assets are a major source of competitive advantage and given the very large differences in performance between the top people and everybody else, it is becoming increasingly critical for boards to be involved in talent management to assure that their companies' most important assets and competitive advantage are not being mismanaged."
Key Findings: Diversity and Governance
"Women tend to put the responsibility squarely on board leadership, while men see it as both a pipeline and a leadership issue," said Henrietta Holsman Fore, co-chair of WCD. "Women view the board chairs, lead directors, and nominating committee chairs as the real change agents in building a diverse boardroom."
Boards don't think diversity is a priority, competence is first. Terms like inclusion and diversity aren't all that important.
Said Ms. Bell, "In 2012, we found that 46% of U.S. directors and 57% of directors outside the U.S. could not say that seating a diverse representation on the board was a priority for their boards, and less than half (47% of U.S. and 35% of non-U.S.) could say their boards had adopted measures that successfully advanced diversity on the board. The percentages for 2011 were almost identical."
The pattern repeated when directors were asked whether they personally supported boardroom quotas. Thirty-nine percent of women and just 18% of men do support them. Outside the U.S., 28% of directors support quotas, while only 22% of U.S. directors do.
"Board quotas remain an evergreen topic, as some countries seek to legislate diversity," said Ms. Gwin. "However, we see from these numbers that quotas don't garner an overwhelming support even from women directors."
"Greater regulation in general - whether involving governance decisions, financial disclosures or diversity quotas - are just not that popular with boards," agreed Stautberg. "Directors are well aware of the challenges they face in steering their companies into recovery, but they do not see regulation as the solution."