Gender Diversity at the Board Level Can Mean Innovation Success
Improving recruitment on corporate boards can boost innovation and creativity.
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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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.
The Research
This survey was conducted through a partnership between Boris Groysberg from Harvard Business School; J. Yo-Jud Cheng from the University of Virginia; WomenCorporateDirectors Foundation, led by Susan Stautberg; Spencer Stuart, led by Julie Hembrock Daum; and independent researcher Deborah Bell.
Over 5,000 board members of companies based in more than 60 countries responded to the survey between October 2015 and June 2016. Most responses (80%) were received between October and December 2015. Between January and June 2016, we worked with Harvard Business School’s Global Research Centers to increase the response rate outside of the United States. Additional responses from this second survey wave were predominantly concentrated in the Middle East, Asia, and Western Europe.
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About the Authors
J. Yo-Jud Cheng is an assistant professor of business administration at the University of Virginia’s Darden School of Business. Boris Groysberg (@bgroysberg) is the Richard P. Chapman Professor of Business Administration at Harvard Business School, faculty affiliate at the HBS Gender Initiative, and the coauthor, with Michael Slind, of Talk, Inc. (Harvard Business Review Press, 2012).