Women Chairs: The Time Is Now | INSEAD Knowledge

With more women as board chairs, business can better serve society.

Companies should benefit all their stakeholders. This is increasingly on the minds of regulators, activists, politicians, pension investors and individuals of this world. As Larry Fink, Chairman and CEO of Blackrock, wrote in his 2019 Letter to CEOs, “society is increasingly looking to companies, both public and private, to address pressing social and economic issues”.

If we want boards to deliver benefits for a wider stakeholder group – and stop focusing on short-term profits – we need to shift the dial on women becoming chair of these boards. Failing that, the corporate landscape won’t change.

While there are excellent male chairs, too many are products of the old boys’ network. These men pay scant attention to their increasing accountability towards stakeholders beyond their shareholders. In the United Kingdom, the days of the Financial Reporting Council (the watchdog for auditors, accountants and actuaries) are now numbered after it was embroiled in one controversy too many.

Why more women chairs is a game changer

McKinsey & Company has a long history of published reports that have established the business case for diversity. Organisations with greater gender diversity outperform others, typically have a healthier risk profile and make better investment decisions. All of this generates greater client and customer satisfaction.

Based on peer-reviewed research, surveys and anecdotal evidence, we now know what makes an effective board chair. Beyond the obvious group of traits including integrity, personal strength, courage and intelligence, the critical skills are:

  • an ability to influence others without dominating
  • an engaged vision of the future
  • strong emotional intelligence
  • coaching skills.

 

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