Risk & Compliance

On Boards, Are Women the Fairer Sex?

Time for more women directors, say female finance execs; but are women more ethical than men?
Lisa YoonApril 10, 2003

As corporate governance continues to be hotly debated in the wake of several high profile business scandals, some women executives are pushing for more female board members.

That was the topic of a seminar held Tuesday in Waltham, Mass., by the New England Chapter of the National Association of Corporate Directors.

Panelists at the discussion, moderated by D’Anne Hurd, CFO and general counsel of Starbak Communications Inc., cited the need for increased board diversity and independence. The argument: women are gaining increasing clout as earners, investors, and business owners, and they’re more qualified than ever to fill the gaps in corporate boards.

“It makes good business sense to have women on the board,” said Patricia M. Flynn, Trustee Professor of Economics and Management at Bentley College. Flynn, who serves as a director at BostonFed Bancorp, argued that women “bring different perspectives to the table and there is an increasing pool of experienced women available.”

Flynn also noted the number of women with finance expertise. Citing her own research, she said that women now account for 52.1 percent of all financial managers and 58.8 percent of all accountants and auditors.

In addition to finance qualifications, Flynn noted that women made up 47 percent of all investors in 2001, and that they own 38 percent of all U.S. corporations.

Starbak’s Hurd added that more women board members would more accurately reflect companies’ shareholder constituencies. “Women bring a diverse set of perspectives that are necessary for companies to successfully navigate a challenging economy and an increasingly strict regulatory environment,” she said. Hurd currently serves on the boards of Data Translation Inc., The Advanced Companies, the Corporate Board Resource Committee, and the Advisory Board of NACD New England.

A more controversial argument — and one that was not debated at the NACD meeting — is that women are more ethical than men. That was suggested by some executives at the Dynamic Women in Business conference at Harvard last week, according to a report in the Web site Women’s eNews. Deirde O’Connell, a vice president at Lehman Brothers, claimed that women tend to be less competitive and less driven by money than men, according to the report.

Not everyone subscribes to that theory, however. Many at the conference said all executives face the same ethical challenges. But they did echo the arguments about diversity that the NACD panelists made. “If you lack diversity you’re going to have one opinion and that’ll be the consensus,” said Janet Hanson, founder of Milestone Capital Management. “Right now, most women aren’t at the table to offer an opinion.”

At the NACD meeting, panelists offered suggestions for recruiting female board members. They recommended seeking out experts in the finance and accounting function in addition to CEOs. They also suggested seeking out CEOs of small businesses, asking around beyond the nominating committee and current board members, and asking for leads from search firms and organizations like The Boston Club and Catalyst. Those organizations have databases of qualified women candidates.

4 Powerful Communication Strategies for Your Next Board Meeting