Women with Board Aspirations: Four Trends to Keep on Your Radar
If you’re a woman hoping to secure a seat on a public or private board, there are a number of complexities you’ll need to be prepared to navigate today, explains Ellen Zane, CEO Emeritus at Tufts Medical Center.
Those complexities will impact both corporate and not-for-profit boards, though often in different ways, points out Laurie Pascal, MBA, MPH, Senior Lecturer on Health Management at Harvard T.H. Chan School of Public Health. Both Zane and Pascal also co-direct Harvard’s Women on Boards: Getting On and Adding Value program.
Current Issues to Follow
They share the following trends that should be on your radar. Zane speaks from her vantage point in the corporate board sector, while Pascal draws on her experience in the not-for-profit board world.
Trend #1: Activist Campaigns
Activist campaigns are a serious concern for boards today—and how they operate is different for corporations and for not-for-profits. On the corporate side, activists are investors with considerable holdings or ‘positions’ in a specific company (stock) and who believe they can bring value to the company—by either sitting directly on the board of the company and/or by materially influencing the company and the board’s strategic direction. This could include selling the company, divesting certain parts of the company, or changing the CEO or other members of the board. Also, capital allocation is front of mind for activists as the return on their investment is paramount. On the not-for-profit side, board members need to be aware of the concerns of the multiple stakeholders who have special interests in the mission and activities of the organization. They may attempt to exert influence on an organization’s board in order to achieve their desired outcome for the constituencies they represent.
Corporate board impact: “Often, Wall Street views activist participation as a positive way to invigorate a company’s stock and performance. However, company boards and management frequently see activist participation as disruptive and not always in the best interests of the long-term value of the company,” Zane says. For company directors (board members), these diverging points of view can make navigating the role of the activists difficult. Board members often find that balancing the various interests of all parties can be complex and requires sound judgment, as they must defer to whatever is in the best interest of all shareholders.
“For a corporate board, activists will typically buy enough stock so they have a say or sufficient standing to express their preferences relative to the operations of the company in their quest to drive up stock prices,” Zane says. She suggests that women considering a board spot should ask a lot of questions of the company to determine if there is any governance exposure or performance lapses that should give a potential director any pause. New directors should be prepared to help the board weather the pressure that can result. “They must always stay focused on the best interests of all shareholders versus individual self-interest or individual shareholders,” she adds.
Not-for-profit board impact: Trustees, which is the name typically used for board members of not-for-profits, are accountable to the communities or populations served by their organizations. Activists can exert pressure on board members in an attempt to influence the organization’s direction or specific actions. Pascal says that it’s important for women seeking or holding a board seat to fully understand the issues that the board is facing and explore the rationale behind the activists’ desires and actions to be prepared to help the board respond appropriately.
Trend #2: Shifting Diversity, Equity, and Inclusion (DEI) Priorities
While there is a trend away from including aspects of diversity, equity, and inclusion (DEI) within corporate metrics or specific objectives, diversity is still an important concern for most boards. In fact, studies show that diverse boards have better cultures and perform better than their counterparts.
Corporate board impact: “Companies remain dedicated to DEI now, but they are reframing how they think about it, talk about it, and report on it,” Zane explains. This means women need to continue to understand and expect that their board opportunities must be earned because gender diversity remains important but not as much of a differentiator as it once was. “Don’t wear your heart on your sleeve but be confident and well prepared. There is no substitute for competency,” she says.
Not-for-profit board impact: Diversity continues to matter for not-for-profit boards, but it’s not just about gender. Rather, boards need to pay attention to how much, and how effectively, the board understands and represents the communities and populations being served, as well as having the needed skill sets to effectively govern, Pascal says. “Therefore, in exploring opportunities on potential not-for-profit boards, having an appreciation for the community’s make-up, values, needs, and perspectives is critical.” And Pascal notes that looking at the composition of the current board—including age, race, gender, background, and experience—can offer clues about its commitment to diversity.
Trend #3: Artificial Intelligence (AI) Capabilities
As artificial intelligence (AI) continues to evolve, the latest capabilities are changing the way companies and organizations do business. Board members need to know the basics of AI and how it impacts their work. No one expects board members to predict the future or know how AI will ultimately affect the company’s operations. Nevertheless, watching the trends and knowing the basics will be increasingly important and expected.
Corporate board impact: “Lots of people will bill themselves as an AI expert and it will be trendy to talk about how AI will impact companies. But I don’t think anyone has yet figured out [how it will play out in the coming years],” Zane says. She points out that women don’t need to become experts in this area. Rather, they just need to stay on top of the latest AI tools and know how to be part of the conversation. Issues like reliability, trust, and data breaches should be on their radar. Risks associated with AI should be top of mind, as well.
Not-for-profit board impact: “Not-for profits organizations, especially those that are smaller and less well financed, need to approach technology especially thoughtfully. Understanding what AI can do now, where it might be headed, and how the use of AI can benefit a particular organization is becoming a more common topic of conversation. AI won’t solve all problems, and there are still inherent weaknesses, such as bias, that need to be recognized. At the same time, it’s an important tool,” Pascal stresses. “But by becoming educated about what it can—and cannot—do, you will be able to help guide your organization’s decision-making to gain value from AI as it evolves.
Trend #4: Global Concerns
Inflation and high interest rates, concerns around global warming, immigration, nations sharply divided by politics, wars in Europe and the Middle East, and other issues can all influence the bottom line of companies and organizations.
Corporate board impact: “Women interested in serving on a board need to stay up on global affairs and know how the latest events will affect companies and how they perform,” Zane says. By staying up on the latest news, you can be prepared to discuss these topics knowledgeably and bring more value to your board seat. “Companies are increasingly being asked to take positions on major current events. This is not always wise and board members need to put their personal views aside and remain focused on the best long-term interests of the company,” she adds.
Not-for-profit board impact: “Women need to be aware of what is going on in the world, as well as the local pressing issues in the community being served,” Pascal says. “In higher education, for example, declining birth rates will negatively impact colleges and universities on a long-term basis. Climate change has increased the need for emergency housing, food, and health care in the wake of greater hurricane and forest fire activity.” She says that when women stay up-to-date, they can contribute to the conversation to guide their organization in the most effective way.
Harvard T.H. Chan School of Public Health offers Women on Boards: Getting On and Adding Value, a two-day on-campus course that equips health care leaders with the skills, strategies, and competencies to secure a board directorship—and advance from there.
