By now you’ve probably heard that California has become the first state in the country to mandate female directors on public company boards headquartered in the state. You can read more about it here. The new law is intended to increase diversity on public company boards.
Boy howdy have I been having some interesting conversations about this move by California. Some people are cheering: “This is great! We may finally see more equal representation on company boards.” Some people are jeering: “So a more qualified man is going to be pushed aside by a less qualified woman? How is that progress?”
It brings up a fundamental problem about diversity initiatives. What is the problem they are trying to solve? And how do you address the fact that many people believe these initiatives are attempting to solve a problem that does not exist?
What is the problem?
No one is debating the statistics.
The California legislation states that “26% of the Russell 3000 companies based in California have NO women directors serving on their boards.” Further, “[n]early one-half of the 75 largest IPOs from 2014 to 2016 went public with NO women on boards.”
What these statistics don’t address is why? And that’s where the disagreement comes in.
Why aren’t there more women serving on company boards?
Why are there so few women serving on company boards? One camp believes it’s due to discrimination. The other camp believes it’s due simply to the fact that the men on the boards are more qualified than the female candidates.
The folks I talk to take one of two positions on the California law. One – the result will be less qualified women will be chosen over more qualified men. Two – the result will be less qualified men will not be chosen over more qualified women.
Who is right? That depends on the process used to identify, recruit, and ultimately seat a board member. Is there bias in that process? If there is, how do you remove it?
Research points to unconscious bias in hiring practices. Read more about these studies here. <link to https://www.shrm.org/hr-today/news/hr-magazine/0418/pages/can-blind-hiring-improve-workplace-diversity.aspx>
Companies have had success with “blind recruiting” and “blind hiring.” They use software and other methods to screen resumes and job applications to remove names (which can indicate gender, race and nationality). In another example, many symphonies have instituted a blind audition process where musicians audition behind a screen.
These processes enabled organizations to remove bias in order to more accurately identify the best people for the job.
More transparency around how board members are chosen
So who is the best person for the job? How are board members chosen? How are candidates recruited? What does the interview process look like? What criteria matters most? How are candidates evaluated? How is the process/system streamlined to reduce bias?
My hope is that the process for selecting and choosing board members will become a main focus of this initiative with an emphasis on transparency.
The California law is sparking a great deal of debate. There are already constitutional challenges to the law, so its fate is still uncertain. But it’s an interesting experiment. I look forward to seeing how it all turns out.