Women on boards Pacita “Chit” Juan
Only Irene Natividad’s Global Summit of Women (GSW) could put all these men in one panel discussing an unusual topic of why we must have diverse corporate boards. At the recent GSW 2014 in Paris, France, we heard the testimonials of five exceptional CEOs: Michel Landel of Sodexo; Gianmarco Monsellato of Taj-Deloitte; Frederic Oudea of Societe Generale; Sol Trujillo, formerly of Orange, US West and Telstra; and Thierry Pilenko of Technip France.
Very interestingly, Sol Trujillo quoted from Credit Suisse reports about the Return on Equity: 16 percent vs 12 percent; Debt of 48 percent vs 50 percent; Higher book value of 2.4 vs 1.8 and average growth in net income of 14 percent vs 10 percent for companies who have diverse boards or those who have women and men in their boards.
He is a great believer in diversity because he has seen it work in three companies he transformed in three different countries: Australia, United States and France.
Irene Natividad, Philippine-born American, also presented her Women Corporate Directors International research on the growth of numbers of Fortune 200 companies who now have embraced diversity in their boards.
She clearly showed the rising numbers of companies from 2004 to 2014. It is interesting to note that France, who asked for a quota of 30 percent to include women, has seen their companies adopting the global move towards diversity in the board room.
Laggards were China and the US, which saw fewer companies having women on boards (as an all-male board has been the default scenario). Some countries merely suggest the language of diversity rather than having a law for publicly-listed companies (PLCs) or government corporations to have diverse boards.
There is a strong indication that there needs to be a law so companies will comply, rather than waiting for boards to just appoint women based on potential or family affiliation. Some companies may comply by making the wives or daughters of CEOs or founders sit in the board. When these women, however, perform and add value to these family boards, we will see more business cases proving the positive effects of diversity.
Where do we find these women who are qualified to become Independent directors? I had the chance to meet Tan Sri Datuk Dr. Rafiah Salim of Lead Women of Malaysia, and she told me how they train more women to qualify for board positions. Lead Women, whose mission is to support diversity leadership, practically gets more women interested and trained for corporate directorship.
In the Philippines, we have the Institute of Corporate Directors (www.icd.org), Institute of Solidarity for Asia or ISA, and we have of course the Women Corporate Directors International-Philippine chapter (WCD) who are on the lookout for women who want to sit in boards as independent directors.
In Korea and Japan, there are moves to get a database of all the women who can join the workforce so that the companies will no longer say “it’s hard to find a woman.” In the Philippines, we are looking for different databases: Women directors, women entrepreneurs and women senior executives.
Just like gender sensitivity programs in local governments (LGUs) started by Philippine Commission on Women (PCW) and the Canadian International Development Agency (Cida) under the Great program, we should also have gender-sensitivity training for the Securities and Exchange Commission (to influence private companies), the Philippine Stock Exchange (for publicly listed companies) and even in the academe. This will pave the way for more women to come out and present themselves as candidates for directorships.
Some companies make it a Corporate Governance (CG) deliverable. They put diversity language in their CG code, or in the stock exchange listings of many countries now.
Since the adoption of these initiatives, Fortune 200 companies now (2014) have 17.3 percent of board seats held by women as compared to 10.4 percent in 2004. For best country examples, France has the most growth from 7.2 percent in 2004 to now 29.7 percent of companies with women in boards.
I have heard from some friends (one a notable female lawyer) that we should not legislate this because women must be appointed on potential or on performance. There are women who say “earn it,” or “deserve it.” Why must we have to prove anything? Why are friends of the owner, friends of people in power appointed to boards without having to earn it?
Even a friend of mine, who is a long-time journalist and influencer, cannot be convinced that there is a business case. And that is why I am challenged to show these two friends the business case.
Not a lot of people in media want to cover stories on diversity. Media find it boring to cover women-centric events. Until they know that the numbers will show it. This, my dear readers, is the secret sauce of many global companies and our PH companies should not be an exception. Why don’t we give it a try? And maybe someday, join the top 200 Asian companies. This may be the great differentiator for companies who need to turn the corner or be in the black. Try putting women in your boards. Conversely, if you have an all-woman board, try adding a few good men.
That is what we mean by diversity. And that makes good business.
(The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is vice chair of the MAP Communications Committee. She is a founder and owner of ECHOStore sustainable lifestyle, ECHOmarket sustainable farms and ECHOcafe in Serendra , Podium and Centris QC malls. She is also the president of the Philippine Coffee Board Inc. Feedback at <[email protected]> and <[email protected]>. For previous articles, visit <map.org.ph>.)
