Gender Equity Can Make America Competitive

In his recent address at West Point, President Obama said the U.S. must always be a leader. And yet, leaders of U.S. corporations, so far, have seemed complacent with a lagging status quo.

According to GMI Ratings, the respected provider of global research and risk affecting the performance of public companies, 14.8 percent of U.S. companies have at least three women on their boards. In Norway, 63 percent of companies do. In France, over 50 percent of companies have at least three women on their boards.

In the U.S., over half of college degrees, graduate degrees, and Ph.D.s are earned by women, but only 16.9 percent of board members of S&P 500 companies are women.

Clearly board members are wasting the good talent our country has to offer.

Boardrooms of U.S. corporations have been slow to react to extensive, compelling research (Catalyst, McKinsey, Credit Suisse, Deloitte, among others) that links gender diversity in the boardroom, as well as in top executive positions, to strong company financials. So the issue is not just about fairness and good governance but about good business, too.

Business leaders including Warren Buffett, Bill Gates and Sheryl Sandberg have preached the importance and financial advantages of women as workplace leaders, yet our companies’ boards of directors are having trouble keeping pace, especially with our peers in Europe who have set quotas to move forward.

How can our companies catch up and eventually lead? Current board members can follow a three-step process to turn the tide here in America. 1. Recruit from the top.

In 1968, Yale University accepted one woman for every seven men. How strong do you think the seventh male student was compared to the #1 female? There are many board-ready women available to join your board. Actively seek the best board candidates, and you will succeed in finding the best.

2. Challenge your boardroom.
Diverse points of view lead to better decisions. As General George Patton said, “If everyone is thinking alike, then somebody isn’t thinking.” Step out of your comfort zone to seek diversity, and you will succeed in finding diversity.

3. Remember lessons from the sandbox.
When we were children playing in the sandbox, we all learned to share. Setting and adhering to board term limits and age limits is forward-thinking for your company. Sharing is not a weakness.

It is late but not yet too late for US corporate boardrooms to look in the mirror and shun complacency.

Corporate America will be stronger for it, and so too will America.
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Eve Ellis is a portfolio manager of The Parity Portfolio, a gender lens discretionary portfolio, providing investors with opportunities to seek financial and social returns. Visit Matterhorn Group and the Parity Portfolio at Morgan Stanley: http://www.morganstanleyfa.com/matterhorn/ Follow Eve Ellis https://twitter.com/parityportfolio Follow us Twitter.com/NobleProfit Like us on Facebook.com/NobleProfit Register at NobleProfit.com to gain valuable insights in related topics.

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