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Symposium 2012

Solution for Implementing Board Diversity

The Challenge

In the wake of the global crisis, there is clear momentum towards changing the way that business is conducted—whether in the form of increased regulations, greater accountability or changing corpora ...

In the wake of the global crisis, there is clear momentum towards changing the way that business is conducted—whether in the form of increased regulations, greater accountability or changing corporate leadership. Such initiatives include changing the composition of corporate boards to include more women. What progress has been made on these initiatives and what would make them more effective?

Engage male corporate leaders in actively increasing the number of women directors.

Since the majority of CEOs and board directors globally are men, no real progress in increasing women in corporate leadership will happen without the visible leadership and engagement of male business-leaders. Men are also more likely to listen to other men. Australia provides a unique model with a group of CEOs across industries called the "Male Champions of Change," who came together to advance gender equality across their organizations and most importantly, to act as public advocates. Twelve CEOs comprised the original group, which has now grown to 22.

Combined with the Australian Stock Exchange’s board diversity listing requirement and activities by other groups, there has been real momentum in appointing more women to the boards of companies. In 2012, 24% of new board appointments in Australia were female compared with just 5% as recently as 2009.

According to Glen Boreham, IBM Australia’s former CEO, "the key to the strategy is that the group was self-directed… We own the focus of the group and how the solutions that we generate might be implemented. Our peer grouping ensures discipline and even creates competitive spirit."

In the United Kingdom, the male voice for change is Lord Mervyn Davies, former trade minister and former Standard Chartered Bank CEO, who was commissioned by the government to review the status of women on boards. His report, released in 2011, had strong recommendations that FTSE 200 companies must double the percentage of women directors from 12.5% to 25% by 2015.

"You can't carry on with a board that doesn't represent your employees or your customer base," says Lord Davies—a message that he has communicated to the chairs of the United Kingdom’s largest companies. His continued advocacy for increasing women’s presence on boards has sustained the public's focus on this issue with press coverage of his pronouncements. Given his stature, other CEOs and board chairs are beginning to listen.

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