By Melissa J. Anderson

According to new research by Boston Consulting Group, real gender equity at corporations won’t be achieved until companies take a pragmatic and measured approach to pipeline management. The authors, Susanne Dyrchs and Rainer Strack, explain that quick-fix approaches like women in the boardroom initiatives that are purely based on pumping up numbers at the top won’t make a difference in the long-term.

They write, “It quickly became apparent early in our research that there is limited benefit to be gained by initiating yet more affirmative-action programs or by simply placing more women on boards of directors, for example.”

That’s why companies need to approach gender balance from a cultural pipeline management standpoint – understanding that each company must diagnose its own particular challenges and address them in a way that is uniquely appropriate to the situation.

By Melissa J. Anderson

Last week the UK group Opportunity Now released its latest report on developing and maintaining a gender-diverse pipeline of high performers. The report is a synthesis of the organization’s 20 years of research on the topic and draws together its best advice on how companies can work toward gender balance at every organizational level.

Helen Wells, Director of Opportunity Now, explained, “In the UK, there is a great focus in terms of the number of women on boards,” particularly following the release of the Lord Davies review which aimed to accelerate an increase in the percentage of female corporate directors.

“But our believe is that you need to manage the leaky pipeline. You need to manage the number of women throughout the organization – not just at the tip of the ice berg,” she continued. Indeed, as Wells points out in the opening letter to the report:

“Even among leading employers who are publically committed to promoting women’s advancement, women’s workforce participation reduces from 54% at non-managerial levels to 29% at senior management level, and further still to 18% at executive level, or just 12% in the private sector.”

She continued, “[The report] is the realization that any meaningful change in terms of leveling the playing field between men and women in organizations absolutely needs to come from a system-wide approach.”

Wells says she hopes that organizations will take a hard look at their systems, policies, and promotion processes through a gender lens.

By Melissa J. Anderson

According to the latest report from GMI Ratings on gender diversity on US Boards of Directors, female representation varies greatly between different regions, owing mostly to the industries that dominate those regions.

GMI Ratings found that 36% of companies in the Russell 3000 have no female directors, and only 8% have three or more women. But the numbers look quite different in the Midwest, where 12% of boards have more than three women. New England and the Mid-Atlantic regions aren’t far behind at 11% and 10% respectively.

On the other hand, in the Mountain and South regions, only 5% of companies have women on their boards, and in the West (Washington, Oregon, California, Alaska, and Hawaii) only have 6%. The state with the best representation of boards with more than three women was Connecticut at 15%, followed by Minnesota at 14% and Ohio and Illinois at 13%. Minnesota also had the lowest number of boards with no women: 15%. The state with the highest number of boards with no women was Texas at 52%.

The report authors, Michelle Lamb, Senior Research Associate and Kimberly Gladman, Ph.D., CFA, Director of Research and Risk Analytics, point out that this has more to do with the industries focused in certain states and regions that it does with the locations themselves.

The Midwest scored high for women on boards – and is also a region highly populated with companies in the consumer staples industry. Consumer staples companies were the most likely to have more than three women on their boards (20%). On the other hand, energy companies were the most likely to have zero female directors (61%) and only 1% had more than three female directors, which can account for much of Texas’ weak representation when it comes to boardroom diversity.

Lamb and Gladman suggest that, because gender diversity issues vary by industry, solutions should be industry-focused as well.

By Melissa J. Anderson

According to a recent study out of UNC Kenan-Flagler Business School, men and women view the gap between genders at the workplace very differently.

Men were much more likely to say that the percentage of women in senior management had risen in the last five years. Men were also more likely to commend their companies efforts at recruiting women.

What is interesting about the study, based on a survey of 925 professionals involved in talent development at top companies in the US, was that the perception gap between men and women was huge – about 20 percentage points wide. For example, 57% of men said the number of women in senior management had increased in the past five years – compared with only 36% of women. Similarly, 53% of men said their companies were “extremely” or “moderately” effective at recruiting women, compared with only 33% of women. And when it came to retention of women, 73% of men said their organizations were “extremely” or “moderately” effective, and only 52% of women said the same.

In each of these cases, men were about 20 percentage points more positive than women regarding their firm’s efforts toward promoting, recruiting, and retaining female employees. This gap shows that men and women experience corporate live very differently – and this difference in perception, because men are still the dominant voices at most corporations, could be slowing the path toward gender diversity at the top.

By Melissa J. Anderson

According to the latest report on the subject of gender diversity in the boardroom, female directors may provide more stability and long-term vision for a company during a volatile market.

The report explains, “…the evidence suggests that more balance on the board brings less volatility and more balance through the cycle.”

Credit Suisse’s extensive report, “Gender Diversity and Corporate Performance” showed a correlation between women directors and outsized results. Based on the study of almost 2,400 companies, firms with one or more women on their boards performed better in terms of share price performance than those with no women. Moreover, during the unpredictable market between 2008 and 2011, the women-effect was even more pronounced.

Urs Rohner, Credit Suisse’s Chariman of the Board of Directors and Brady W. Dougan, Chief Executie Officer, write, “Ultimately, the trend towards greater gender diversity within management looks set to continue – and going forward will provide another metric for those scrutinizing corporate governance. Our research suggests that a specific consequence of greater board diversity for shareholders is one of reduced volatility – manifested as enhanced stability in corporate performance and in share price returns.”

Credit Suisse’s research provides yet more evidence to add to the business case for gender diversity. It also provides a definitive list of global boardroom gender diversity initiatives, thorough analysis of several potential benefits and causes for the business case for diversity, and suggestions on how to advance the cause of gender diversity in the corporate space.

Investing in Women

In their opening letter for the report, Rohner and Dougan describe women as an asset that corporations – and shareholders – should invest in. “While it is difficult to demonstrate definitive proof, no one can argue that the results in this report are not striking. In testing the performance of 2,360 companies globally over the last six years, our analysis shows that it would on average have been better to have invested in corporates with women on their management boards than in those without.”

The authors of the report, Richard Kersley, Head of Global Research Product, Credit Suisse Investment Banking and Michael O’Sullivan, Head of Portfolio Strategy & Thematic Research, Credit Suisse Private Banking, explain, “Our key finding is that, in a like-for-like comparison, companies with at least one woman on the board would have outperformed in terms of share price performance, those with no women on the board over the course of the past six years.”

But, they continue, most of that outperformance is in the volatile post-2008 time period. “In other words, stocks with greater gender diversity on their boards generally look defensive: they tend to perform best when markets are falling, deliver higher average ROEs through the cycle, exhibit less volatility in earnings and typically have lower gearing ratios.”

Causes and Solutions

The report outlines a few potential reasons for the business benefits of gender diversity on boards – for example, that gender diversity is a mark of a better company, that diversity leads to better effort on behalf of all board members, or that companies with more diversity have access to better talent.

One of the more interesting suggestions is that diversity simply results in better performance because everyone tries harder. Kersley and O’Sullivan write:

“…it is not necessarily the performance of the minority individuals that have enhanced the result. Rather, it is the fact that the majority group improves its own performance in response to minority involvement. Simply put, nobody wants to look bad in front of a stranger. Hence, the greater the effort and attention to detail, the better average outcome in a more diverse environment.”

Studies have also shown that diversity enables more thorough discussion as well as a more civil boardroom environment. The authors also emphasize the more “risk averse” nature of women as a potential benefit for boardrooms.

Overall, the authors suggest that gender diversity is a growing trend around the world. By the end of 2005, only 41% of MSCI ACWI stocks had women on their boards. But by the end of 2011, the percentage increased to 59%. Credit Suisse predicts that there will be more companies with women in the boardroom in the coming years.

By Melissa J. Anderson

According to a new report by The National Law Journal, despite years of hard work on behalf of some law firms to attract and retain female lawyers through networking and mentoring initiatives, the percentage of female partners at the US’s largest law firms is still only 18.8%. When it comes to equity partnerships, women are an even smaller minority: 15.1%.

But, even considering the small numbers, as Vivia Chen points out for the Journal, that’s still an improvement, with general partnership having increased from 16% in 2011. Equity partnership remains stagnant at about 15%. This is despite the fact that, as Catalyst data published this month shows, for over two decades the percentage of women enrolled in law school has hovered between 40% and 50%, a significantly higher percentage than that of women in any partnership role, let alone equity partnership roles.

Why do we see such a striking disparity? The research points to a damaging cycle of gender inequality at the organizational level of top law firms.

By Melissa J. Anderson

How can companies generate buy-in amongst majority stakeholders (white men) about the importance of diversity? According to new research, the answer may be to position diversity as a critical leadership capacity, and train them with the skills to navigate diversity effectively. The net result is better managers and a better work culture in which individuals of every background can thrive.

“It’s really critical to engage men, and white men in particular, because diversity and inclusion efforts tend to be framed primarily around women and people from ethnic and racial minority groups,” said Catalyst’s Jeanine Prime, Vice President of Research.

“But white men tend to hold the majority of the positions of power and influence in organizations. We can’t expect to change cultures of these organizations without them being fully engaged. That’s why Catalyst is doing research on men’s engagement in diversity and inclusion and why we launched MARC,” the organization’s online learning community for men who are committed to achieving equality in the workplace.

In fact, the organization’s latest report, “Calling All White Men: Can Training Help Create Inclusive Workplaces,” suggests that by training white men with the tools to approach diversity positively (rather than implying blame), companies can see big results in a short amount of time.

Catalyst worked with Rockwell Automation, a global engineering company, sending white men in its North American sales division to learning labs about white men’s role in leading diversity and inclusion efforts. These men showed improvements on five measures: “critical thinking” about differences, “taking responsibility for being inclusive,” “inquiring across differences,” “empathetic listening,” and “addressing difficult/emotionally charged issues.”

“I was really surprised we that there was measurable change in such a short time frame,” Prime remarked. The team surveyed participants a week before the lab, one month later, and then four months later, and found progress at each step. “At each survey point we found participants were really making improvements in their behaviors, and increasingly acknowledged white male privilege.”

She continued, “That the program could produce such a shift is a testament to the approach. It’s not about shaming or blaming white men, but calling them to leadership and inviting them to play a central role in creating inclusive work environments.”

By Melissa J. Anderson

According to a new study by Corporate Board Member magazine and Spencer Stuart, a leading executive search firm, diversity is becoming a more significant concern for corporate board directors in the US. The vast majority of respondents (79.9%) said they feel that diversity in the boardroom results in increased shareholder value. Nevertheless, even more (88.7%) said shareholders have not approached their company in the past three years about the issue – meaning most shareholders have not had much impact on diversity in the boardroom.

The study also showed that while most board members don’t want to see diversity regulated – through quotas or other measures – about a third of respondents said it may have to come to that.

TK Kerstetter, president of Corporate Board Member, explained, “Research consistently shows that U.S. companies don’t want or think that board diversity quotas implemented in several European countries are needed. I worry that if more companies don’t embrace this inevitable social change of having company workforces and boards more closely resemble the markets and customers they serve, then we’re likely to see increased pressure for a mandated change.”

The study shows that while many directors cite diversity as a concern, most boards are slow to take action on the topic.