Should U.S. Follow Europe’s Lead for Gender Quotas on Boards?

There’s some big news this month on the gender-inclusion front. On March 6, Germany approved a new quota that will require some of the largest multinational companies in Europe to ensure that women occupy 30 percent of their board seats. Currently, the New York Times reports that women hold less than 20 percent of boardroom seats in Germany, which is home to corporate behemoths including BMW, Volkswagen, Daimler (the maker of Mercedes-Benz), Deutsche Bank, and Siemens.

Germany is far from the first in Europe to legislate boardroom quotas—Norway, Spain, France, Iceland, Italy, and the Netherlands have already done so, with Norway mandating the highest percentage of women on boards at 40 percent back in 2008. But many consider Germany to be the most significant country thus far to make this tangible commitment to improving women’s representation on corporate boards. The Times reported that “the measure has the potential to substantially alter the landscape of corporate governance here and to have repercussions far beyond Germany’s borders.”

5-Step Action Plan for Women to Land a Board Seat

In my last post, we discussed the fact that many women miss the boat because they don’t understand the steps to take early in their careers to best position themselves for board membership. (See “Why Aren’t More Women Landing Board Seats?”) Here are 5 practical steps you can start taking today to increase your future chances of getting on a public company board:

Why Aren’t More Women Landing Board Seats?

Abercrombie & Fitch recently nominated four new independent director candidates to the company’s board—all of whom are women. Their election would make 33% of Abercrombie’s board female, which is around twice the national average. While an increasing number of corporate boards give lip service to diversifying their ranks, the latest Catalyst Census showed the U.S. weighing in below eight other countries, with only 16.9% of women on boards in corporate America. Less than one-fifth of organizations had one-quarter or more female directors in both 2012 and 2013. One-tenth of companies had zero women on their boards. What’s more, for the past two years, less than a quarter of companies had three or more women serving jointly on their boards.

Over the years that Catalyst has been charting these trends, there has been little to no increase in women’s board participation, making Abercrombie’s relatively high percentage of potential female board members stand out all the more. Could Abercrombie’s bold move put pressure on other organizations to do the same? From a business standpoint, every company in the nation would be smart to follow suit. A separate report from Catalyst that examines The Bottom Line revealed Fortune 500 companies that had three or more women board directors in at least four of five years significantly outperformed companies with zero female board directors. The former firms experienced an 84% better return on sales, 60% better return on invested capital, and 46% better return on equity compared to the latter.

Give It Back to Get It Back!

December seems to be a time when people pause to reflect on their lives and consider what they would like to see happen in the new year. I know this is true for me. 2013 has been pretty incredible with the release of my third book, a full schedule of speaking events and a number of rewarding client engagements. Yet, as I think about how I spent my time, I realize how important my work in the community has become in my life.

This year I’ve had the opportunity to serve on the boards of several wonderful charitable organizations, including the American Red Cross, the Fairfax (Virginia) Chamber of Commerce, Marymount University and the Virginia Women’s Center. While these organizations are very diverse, they all match up perfectly with my values and support causes that I really care about. Because of this, they provide me with opportunities to give back in a way that is both meaningful and inspirational. Without question, I receive far more that I give to these organizations.

Women Helping Women

This fall, I spoke at a leadership conference in San Francisco and was fortunate while I was there, to reconnect with a dear friend, Nancy Hayes. Nancy served as an executive in IBM for many years and is now the co-founder of MoolaHoop (www.moola-hoop.com) – a company whose mission is to help women owned businesses and entrepreneurs gain the tools and resources they need to grow their businesses. Nancy’s efforts are not only purposeful but they are also timely. Women owned businesses represent 30% of all new businesses in the US each year and they are growing at twice the rate of male owned businesses. Yet, when you look at funding, they get only 5% of venture capital funds and 12% of investment banking.

I asked Nancy how she and her partner actually help their female clients and she said, “I think we help women have a breakthrough by helping them figure out how to talk about their business/goal/mission in a way that others can relate to and then we show them how to build a community of following (social media/customer set) that will help grow their business. Helping people to clearly communicate is one of the biggest advantages you can give them.”