As the economy continues to be reshaped by changing technologies, companies keep searching for ways to better integrate innovation into their strategy. No industry is immune to this need. One way to meet the challenge: focus on gender diversity on corporate boards.
Although evidence on the relationship between gender diversity on boards and financial performance is mixed, studies suggest that gender diversity can play an important role in supporting innovative activity and organizational change. For example, companies with greater gender diversity are associated with higher R&D intensity, obtain more patents, and report higher levels of overall innovation (particularly when there is a critical mass of women directors). This pattern is also reflected in external accolades; companies recognized as innovators have more women directors.
Our research on director recruitment patterns in over 60 countries found that initial investment in recruiting women directors creates positive feedback loops that pave the way for boards’ future diversity and capacity for supporting long-term innovation and creativity. We offer here a variety of suggestions for addressing the gender imbalance on corporate boards.
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Gender Diversity on Boards Across the Globe
Despite the purported benefits of greater board diversity, women hold just 17% of board directorships in global companies in the MSCI ASWI Index, and 21% of board seats in the S&P 500. While the proportion of women directors is increasing, women remain the minority on most boards.
To better understand how boards might foster innovation by increasing director diversity, we conducted a global survey (in partnership with WomenCorporateDirectors Foundation, Spencer Stuart, and independent researcher Deborah Bell) that asked 5,000 board directors about their boards’ priorities, demographics, and recruitment patterns.