Why would a client specifically ask to be presented with female director candidates? While writing this post, I asked the Board Chair of a large, fourth generation real estate business, why he was so keen on finding a female for his company’s next independent director. This is what he told me – with permission to share:
“I went to an all-male college, and had lots of experience in all-male environments. I’ve served on many boards over the years, and I’ve found that the presence of both genders enhances the contributions that all members of the body will make. Men seem to be more constructive with both men and women in the room.”
“I also think that there are points of view that are gender driven. There’s knowledge and sensitivities that differ between the genders. When you have only one gender, you don’t have a balanced perspective or balanced participation.”
“Because women are often the primary caregivers, they are more involved in the educational process and their sensitivities carry over into housing decisions. Men may not see those things. It’s not quite universal, but on the average, women bring different life experiences to the table.”
Research actually supports this view. There are plenty of studies to quote, but let’s look at just one post-2008 study conducted by Leeds University Business School. The study found that companies with at least one woman sitting on their Board of Directors had a greater chance of surviving the downturn than companies without any women on their boards.
There’s plenty of research on this subject, but this post is already pretty long so – take a look at these sites for more data on the advantage of board diversity:
This is a follow-up to the October issue of the Family Business Advisor, which presents the non-strategic value of directors. We are often so focused on finding “the best” director candidates, that not a lot of thought is given to the circumstances under which they will find our family business attractive. How do we appeal to outstanding directors?
The list can be very lengthy, but there are a number of questions we often get from the candidates we try to recruit – some food for thought:
Is there currently a functioning board in place?
Are there other independent directors, or would I be the only one?
Does the family really want outside advice or are they just attempting to appease a group of shareholders?
Have they developed specific expectations for this position?
How would you describe the communication within the family (collaborative, conflictive, for example)?
Does the business have a strategic plan?
How would you describe the leadership style of the current Chair? The current CEO?
Remember that board candidates are interviewing you and your business as well. They want to commit to a board that works well together, knows how to be productive, and presents a culture that is aligned with their own values and business principles. So getting your ducks in a row prior to your search is a good way to send the right message to great candidates!
Family firm CEO founders often make really bad decisions when given the opportunity to select their successor. They’re terrific at running the company, unequaled in closing deals and driving a hard bargain but ask them to name their successor and watch them lose their ability for human reason and corporate leadership. “After much thought, (I decree that) my successor will be insert-first-name-here.
“Much though” is often the son, daughter, niece or nephew s/he thinks will upset as few people as possible or the one with the longest tenure. No matter – the real kicker is this: selection of successor CEOs, by all rights, belongs in the sandbox of the Board of Directors. If the board consists of family and inside managers only, it’s a safe bet they’ll do whatever it is the senior leader – usually parent to many – decides. No open debate among qualified, experienced business people. No obvious linkage between next generation shareholder vision, corporate strategic objectives and successor skill sets. Simply the decree.
Then estate plans are drawn up, control willed to the successor at the death of the second parent to die (if a first to second generation transfer) and, “by golly – I sure handled that well. No arguments among the kids and no room for arguments later on because control is in the hand of the anointed one” the founder assures himself.
Nothing could be farther, father, from the truth! Instead, what may likely happen is the siblings or cousins not given any control will find ways to express their wishes. They will argue during holiday dinners on matters of compensation and reward. They will try to gang up on the new CEO. They may even punish you and your spouse during the waning years of your life by withholding visitation with grandchildren.
Estate plans and bifurcated stock do not equal family harmony. Family and shareholder harmony in family enterprise is achieved through robust governance, perceived procedural justice and healthy debate with unbiased input from serious-minded, experienced business people with no stake in the outcome.
And – here’s another reason to abdicate the decision to a more impartial process and jury. Life is hard enough. You’ve built a terrific enterprise, the source of employment and financial security to all those families. You’ve bested the competition in tough times. You have earned the right to dodge this bullet and avoid being the source of future family discord. Over the long haul – you’ll stand a much better chance of being remembered as a great leader and terrific parent.