As the number of women in boardrooms and on executive committees increases, there reaches a point where women feel safe to speak up, get enthusiastic, take risks, and make waves – without being seen as a threat to the status quo, as overemotional, as a risky hire, or as a token place holder. That number has often been referred to as “critical mass.” Critical mass is the notion of safety in numbers, and most agree that the magic number is 30%.
The idea of critical mass is often referenced in efforts toward increasing the percentage of women in the boardrooms, but it can be applied to any minority group – there’s nothing in the theory behind it to suggest the critical mass effect only works with women. In fact, the critical mass model can be used to encourage the recruitment and promotion of any minority group.
Where Did Critical Mass Come From?
Much of the research on critical mass is settled on 30% or three out of ten (since ten is roughly the size of most boards of directors in the US). One of the earliest notions of critical mass was described by Rosabeth Moss Kanter, the Ernest L. Arbuckle Professorship at Harvard Business School, although she didn’t use the term “critical mass” specifically.
In her groundbreaking 1977 article “Some Effects of Proportions on Group Life: Skewed Sex Ratios and Responses to Token Women,” Kanter proposes that as the percentage of minorities in a group increases (past about 35%, she suggests), the minority individuals can, first of all, form coalitions, support one another and “affect the culture of the group.” Secondly, she says, at around the 65:35 ratio, the minorities are perceived as “individuals differentiated from each other,” rather than mere representatives of, for example, the stereotypical female.
Based on her research, she says that two minority individuals aren’t usually enough to break through the notion of perceived tokenism on teams, and more are necessary to bring minorities out of perceived token positions and into true leadership.
Kanter’s interest was primarily in looking at how tokenism works – and she found that tokenism has as much to do with the dominant group’s perceptions as it does with how the minority individual perceives her or himself. She said that increasing numbers of minorities can influence how minorities are perceived. This is the idea behind the push for gender quotas seen in Norway and other places in Europe and around the world. The theory is that after a certain quantifiable percentage, women are not seen simply as token minorities, and their voices and opinions will be more valued.
By communicating the numbers-based theory around critical mass more effectively, companies can apply the lessons learned through efforts toward gender diversity to other minority groups.
The Thirty Percent Coalition
But critical mass-based gender work has yet to find significant success. While recent research by Catalyst suggests that companies with three or more women directors outperform those with all-male boards, the percentage of women in leadership positions in most industries is still between 15 and 20%.
“When you reach a certain critical mass, the board starts to behave differently,” said Joe Keefe, President and CEO of PAX World Mutual Funds and a founder of the Thirty Percent Coalition. “Conversations are richer, decisions improve, women bring different perspectives to the table, and performance improves.”
Indeed, a new Credit Suisse study of almost 2,400 companies suggests that boardroom diversity improves corporate performance. In fact, companies with more than one woman on their board performed 26% better over the past 6 years than those with no female directors.
Imagine the impact on gender diversity if the conversation around critical mass were one that appealed to both women and companies? The Thirty Percent Coalition intends to do just that.
The group, a collective of advocates, corporate leaders, institutional investors, and state treasurers, is working to encourage companies to appoint more women board members, with the goal of reaching 30% women by 2015.
Charlotte Laurent-Ottomane, leader of the group, explained that the coalition came together last November, wanting to do something to move gender diversity forward. “With all the action, events, and talking, little was being accomplished,” she said. “The 16% was not moving.”
Within the space of a few hours, the group was formed and created its 30% goal and timeline. “It’s an aggressive goal,” she noted, but many think it’s achievable. In fact, she continued, “Our membership has grown by 60% since that initial meeting.”
Keefe said that the focus on shareholders will make a difference – the group has already contacted each of the 41 companies on the S&P 500 with no female board members to encourage them to hire more. The Coalition aims to pressure companies to hire a critical mass of women in the boardroom, and they’re doing it in a language companies can understand – business. “What I think is unique here is that this is the first time a lot of major women’s organizations have gotten together with major institutional investors,” he said.
While the Thirty Percent Coalition is focused on women, the same idea – coupling critical mass with the business case for diversity – can help increase diversity on boards for other kinds of minorities as well.