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Women on Boards: Networking for Tapping the Talent

Research Proposal

Jay Partin, PhD

Managing Director

Diameter Group, Ltd.

San Diego, CA USA

PH: +1 – 619 – 356 - 0408

jpartin@diametergroup.com

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Introduction

The role of women in modern society and in the workplace, in particular, has been the object

of much debate and deliberation since the industrial revolution of the 18th

century. Their

workforce participation rates increased following World War I and World War II to the point

that some women now occupy the highest seats of authority and responsibility in the

corporate world. Those that have achieved those positions didn’t get there easily and many

more have tried to rise to those ranks but were not able to do so for a multitude of reasons,

some personal, some societal, and many for lack of a career path to reach that destination.

Helping to fill this vacuum or void with more certain knowledge and useful tools is the

overall goal of this research.

Women are now engaged in the workforce in larger numbers than ever before. According to

the World Bank’s 2012 Gender Equality and Development Report the number of women in

the workforce has increased dramatically, reaching an 80% participation in the richest

countries. However, the percentage of women who attain the ranks of senior management or

board of director membership is a very small percent. The general purpose of this research

proposal is to attempt to ascertain why this happens, how it happens and what can be done to

change it, namely, increase the number of women on boards of directors. There are numerous

studies that have investigated the causes of under-representation of women in executive

director positions. The explanations range from broad social issues to situation-specific

reasons that determine whether there will be any female directors or, if so, who and how

many.

On a societal basis, the major factors as to why there are so few women directors are twofold:

1) men have historically run businesses and the company boards of directors were an

exclusive domain for men and 2) psychologically, the boards valued cohesion and

conformity, both of which are difficult to achieve with representation from dissimilar

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backgrounds and values. Seeing no business reason to change, they continued to be all male

clubs until relatively recent times, largely the results of the women’s movement that reached

a critical mass in the 1960’s and has culminated in the recent actions by such organizations as

the Lord Davies Report (2010) and US Securities and Exchange Commission

(2009). These

and their European counterparts have issued directives, guidelines and goals with timetables

to facilitate significant increases in minority and women representation on boards of

directors. Interest groups seeking greater board diversity are tracking progress and pressuring

private and public entities to comply.

There are many explanations that have been offered to describe why so few women are

directors. Some of the reasons are the basis for a lot of research that will be included in this

study. They can all be categorised under the general term, “bias.” Bias against women and

minorities who, because of gender or colour, do not have the same experience, requisite

skills, social standing or other attribute that would fit in with the in-group. Kim (2007)

summarised the reasons for lack of diversity for women in management in three ways: 1) the

person centered perspective looks at the position requirements and concludes that the woman

lacks managerial traits, competence and career aspirations needed for advancement. 2) the

organization centered perspective concludes that the practices and dynamics of the

organization doesn’t fit with women, and 3) the institutional perspective focuses on the

impacts of societal and/or cultural values on the organization's perception of managerial

women. These same general arguments have been used in the past to rationalise why women

aren’t suited for board membership. On closer examination, one can see that these all have a

flawed logic and do not hold up to close scrutiny.

As to the person-centered perspective, that argument fails if one performs an objective job

analysis and identifies the actual knowledge, skills, traits and abilities that are required to

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perform the job and assesses the degree of fit the person, male or female, has for that job. The

lack of an objective position assessment and selection process is a primary reason why so few

women are selected for director positions. Arbitrarily assigning value to traditional male

trains as director job requirements will eliminate most women. Similarly, allowing Chairmen

and other board members to recommend people like them will disqualify anyone out of their

network. Heilman and Haynes (2005) have shown that woman can perform as well as men on

common tasks if they have accurate knowledge and information. As this research will show,

stereotypes about women as leaders are unfounded and new evidence shows a distinct style to

complement others.

As to the organization-centered perspective, that explanation assumes that systems,

procedures and methods are best understood by men who designed them and that women lack

the experience, understanding and aptitude to perform to the same standards as men. Kanter

(1977) found that performance in organizations favour men because they have access to

information networks typically unavailable to women, thus contributing to their lesser ability

to perform. The same principle applies to board membership for women. If they are denied

access to top management positions, serve in “trophy” roles, they will not be able to qualify

for position descriptions that prescribe experience levels they are unable to acquire.

The institutional perspective is a function of old social mores that led to stereotyping that has

prevented women to have access to the types of programmes, educational experiences and

jobs that would prepare them for senior management roles and directorships. This is a

cultural artifact that has changed slowly and will continue at its own pace unless the

corrective actions now underway are fully implemented and sustained.

This is a general description of the environment that now exists and which will need to

change in order for greater diversity to occur on corporate boards. Some of the efforts that

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have been taken have produced positive results. Participation rates by women have steadily

increased over the past two decades, although slowly. Boards with one or more women now

show that at the end of the last decade of the 20th

century, some progress had been made

(Daily et al 1999). The average number of women in Fortune 500 boards doubled between

1986 and 1987. More recent data from the Women on Boards Report (2011) show that

females now compose 12.5% of the members of the corporate boards of FTSE 100

companies. Norway is the country leader at the moment with a 40% participation rate of

women.

These results show that something can be done to effect change on corporate board

membership. The questions still remain as to what works and how to implement them. There

are many answers to those questions because several things have been tired and all have

worked to varying degrees. Burgess and Tharenou (2002) and Mattis (2000) reviewed the

results of several programmes implemented by Fortune 500 companies and summarised the

programmes they undertook to affect boardroom diversity. The actions can be summarised

as: 1) redefining pool eligibility, 2) internal company promotions via career ladders, 2)

objectifying the selection process, and 4) involve women in subcommittees having to do with

central and core business issues.

These were not done for altogether altruistic reasons “because it was the right thing to do.”

There are also legitimate business reasons for doing so. The benefits of adding women and

minorities to corporate directorships have been widely investigated and identified some

tangible benefits while not being able to substantiate some claims. Perhaps the most

quantifiable study was done by Credit Suisse Research Institute (2011) in which they were

able to verify that companies with at least 1 woman on their board, over a 5 year period,

could benefit as follows: 1) Higher return on equity (ROE) @16%, 2) Higher Price to Book

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Values (P/BV) Multiples = 2.4x, and 3) Higher average growth (14%). They also suggested

that non-financial benefits included: 1) A signal of a better company, 2) greater effort across

the board, 3) a better mix of leadership skills, 4) access to a wider pool of talent, 5) a better

reflection of the consumer decision-maker, 6) improved corporate governance, and 7) risk

aversion. These results were further bolstered by Professor Nick Wilson of Leeds University

Business School who stated that having 1 or more women on the board could reduce

bankruptcy risk by 20% or more.

With potential benefits like this and the prospect of having legislative mandates that go

beyond the present suggestions and disclosure requirements of the regulatory bodies’ recent

actions, there are serious efforts in process to find more qualified women outside directors. In

addition to announced board member additions, executive search firms have adopted a

Voluntary Code of Contact and have expanded their operations to meet increased demands.

With the demand for women on boards increasing and a knowledge that qualified candidates

are in scarce supply, how are the needs going to be met? There are a few options that are now

being used. The fundamental strategy is to change the selection criteria. A concomitant

change is to conduct a thorough needs analysis and commission qualified resources to recruit

and verify candidates that meet the specifications. Such a process would need to be disclosed

inside the board and to those with a need to know. Once agreed to, the search would begin by

identifying talent pools and selecting the best qualified candidates. This is an initiative that

organizations can take, but what can an interested board prospect do to enhance her prospects

of qualifying and being discovered? That is the aim of this research.

In the past, board positions were usually filled by the Chairman from among his direct

contacts or contacts in his board’s networks. Depending on the power of the Chairman, he

usually had the power to influence the choice to fill any vacancy. If the Chairman is weaker

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than the board, he would most likely need a consensus or a majority of the board to concur

with his recommendation. The process is an example of “old boy,” closed group networking

that has created corporate boards for decades. It is an efficient system. Only like-minded

males with similar work experience, education, age, ethnicity and values can expect to be

accepted for membership.

Literature Review

We have seen that networking works for men, but, if women don’t belong to those networks,

how can they ever gain access to corporate board rooms? If corporations were inclined to

breach the gender barrier, how can they establish linkages with viable candidates? Several

studies have been done that show ways that women can network themselves into those

circles. Forret and Dougherty (2004) determined that “network behaviours,” defined as

“individuals’ attempts to develop and maintain relationships with others who have the

potential to assist them in their work or career.” Their study examined 5 types of networking

behaviours: maintaining contacts, socializing, engaging in professional activities,

participating in community, and increasing internal visibility. Results showed that men and

women network differently and with different results. Those who were able to increase their

internal visibility by engaging in high profile projects received more promotions and

increased compensation. Maintaining external contacts and involvement in community

activities had a positive effect on career advancement, but more so for men than women.

Does this mean the women are less effective in managing their networks than men and if so,

why?

Searching for a director level position is similar to searching for a job. It involves many of the

same techniques. It requires communication, information gathering, and contact with

individuals and organizations that have openings to fill. This research proposal assumes that

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networking is an essential component of enabling women to achieve greater access to director

positions and that better understanding and utilising the networking process will facilitate that

goal. We will conduct a survey of perceptions as to what factors are important for board

positions, size and composition of social networks, how these are related and how they may

affect board search and selection processes. We also expect to find estimation of required

search intensity as measured by time. Hoye et al (2007) found that the size of one’s network

and the intensity or strength of the relationships affects the outcome of the search. It affects

the level of the organization contact and helps determine the level of introduction into the

organization. People with a higher status in terms of education and status are likely to provide

greater assistance and more valuable information (Aguilera, 2002; Reingold, 1999).

Wanberg, Kanfer, and Banas (2000) described the intensity of networking that is required for

job search success.

The model for this process of networking and job search is described in the Appendix, Figure

1. It is based on an integration of networking principles and modified social exchange theory.

The social exchange theory was originated by Homans (1961) and Blau (1964) was that value

is given for value received (i.e. reciprocity). We have combined that concept with a

networking model to explain how someone might approach the prospect of obtaining a

directorship on a board of directors. The major actors and their roles are accounted for in this

scenario. The model describes the flow of information in the system and how it can be

accessed by aspiring board members.

Research Methods

This study will set out to determine the networking process that was used by incumbent board

members to obtain their appointment as well as determine the networking strategies in use by

persons now seeking director positions. The focus will be on how individual networks are

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defined, how they are utilised in seeking or maintaining board relationships. The design calls

for a combination of personal interviews of 5 men and 5 women who are either board

members or seeking appointments and survey of a population of 30 persons who are seeking

board appointments.

The specific aims of the research are to answer these questions.

1. What networking methods do you use/recommend for business contacts?

2. What methods are most effective for maintaining visibility among those you wish be

associated with?

3. What personal attributes or qualities are perceived to be most attractive for

prospective board candidates?

4. How can the answers to these questions be used to identify ways to facilitate better

access for women into corporate board networks?

A two part questionnaire consisting of approximately 30 items will be given to each

participant. (Appendix, Survey Questionnaire Part 1 and Survey Questionnaire Part 2) The

questionnaire will consist of both categorical item responses (demographics) and 5 point

Likert scales using descriptors such as “Almost Always” to “Infrequently,” with a “Not at

All’ option. The questions are based in part on research done by Sheridan and Milgate (2005)

in which they examined corporate practices when considering adding women to the board of

directors, the qualities they look for and how they are addressed. Hoye (2007) developed a

method for measuring the strength and effectiveness of networking models used in job

searches. The research model will employ features of both to form a new networking model

with a specific application for board level job search.

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Hypotheses that will be tested:

Hypothesis 1: Internal/Subjective Items will be rated higher than External/Objective Items

Hypothesis 2: Current board members referred by Chairman or board members will

recommend less time for networking.

Hypothesis 3: Prospective board members will rate internal/subjective items higher than

external/objective items.

Hypothesis 4: There will be no difference between the ratings of current or prospective board

members on organization selection requirements.

Hypothesis 5: Network size will be positively associated with time spent networking.

Hypothesis 6: Tie strength will be positively associated with time spent networking.

Hypothesis 7: Tie status will be positively associated with time spent networking.

Hypothesis 8: Men will rate themselves highest in network size, strength and status.

Means, standard deviations, and correlations among all variables will be computed using

Cronbach alpha, t-tests, ANOVA and factor analysis.

Success models will be developed in terms of what worked for current directors and

consensus models for those who are currently seeking director positions.

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Appendix

Demographic Survey Questions

Gender

� Male

� Female

What is your current position?

� Existing board member

� Aspiring board member

Are you

� Non Executive Director

� Corporate Director

How many NEDs do you hold

� 1-3

� 4-6

� 7-10

� 10+

Highest level of education achieved

� College graduate

� Graduate school

Survey Questionnaire Part 1

Almost Always

Very Often

Sometimes Infrequently Not at

All

What do you believe is the most crucial in

attaining a board position?

Strong track record

Business contacts

Good understanding of general business principles

Intelligence

Communication qualities

Objectivity

Integrity

Leadership qualities

Advanced educational background

Involvement with not for profit or community

organization

Diplomacy and tact

How to be brought to the attention of the board? Almost Always

Very Often

Sometimes Infrequently Not at

All

Recommended by Chairman

Recommended by board member of company

Recommended by board member of own company

Was shareholder of company

Had family affiliation with company

Recruited by executive search firm

Don’t know

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For Current Board Members Almost Always

Very Often

Sometimes Infrequently Not at

All

Why do you think you were selected as director?

Possess desired area of expertise

Hold appropriate job title/leadership position

Have high visibility

Fit desired regional profile for board member

Have corporate board experience

Have not-for-profit experience

Be a member of a minority group

Don’t know

For Prospective Board Members

What do you think it takes to be selected as

director? Almost Always

Very Often

Sometimes Infrequently Not at

All

Possess desired area of expertise

Hold appropriate job title/leadership position

Have high visibility

Fit desired regional profile for board member

Have corporate board experience

Have not-for-profit experience

Be a member of a minority group

Don’t know

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Survey Questionnaire Part 2

• Each item will have an appropriate Likert scale

Network size* 1. I know a lot of people who might help me

find a Board position.

2. I can count on many relatives, friends, or

acquaintances for information about Boards.

3. I know few people who might help me

search for a Board position (reverse coded).

4. I have connections I can talk to about

helping me find a Board position.

Tie strength* Most people who might help me find a

Board position:

1. Are people I know very well, such as

family or friends.

2. Are people I often talk to.

3. Are people I feel comfortable talking to,

even about sensitive subjects.

Tie status* Most people who might help me find a

Board position:

1. Have received a good education.

2. Have a good Board position themselves.

3. Are generally doing well in life.

Networking Over a three month period, how much time

would you recommend spending on

networking to facilitate getting a director

position: _____ hours or _____ days

Figure 1. Network Model for Director Position

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