Women on Boards: Inclusion vs. Influence

Kimberly A. Whitler and Deborah A. Henretta

“I believe the advantages of diversity and, more broadly, inclusion, are relatively well-known, and for some of us are confirmed by experience,” A.G. Lafley has said, having served on a number of boards: Procter & Gamble, General Electric and Legendary Entertainment among them. “More creativity, more innovation, more inquiry, more and broader experiences to draw on, better problem-solving, greater ability and willingness to suspend judgment and work together to find a better ‘third way.’”

This isn’t just an observation from the former CEO and chairman of Procter & Gamble; evidence from academic and consulting research suggests it is accurate. Corporate boards with gender diversity tend to be more innovative, strategic and effective than those without.

And the facts haven’t been ignored; the percentage of women on boards has risen in the last 10 years, and on average, boards in Fortune 500 companies include two women (twice as many as was the case in 2006).

But the momentum is slowing, and what we’ve observed is that few women are reaching the power positions — the board roles that lead sub-committees and can have significant influence. That doesn’t just mean a role as chair of the board, but also chair of the more powerful committees on the board — usually the audit, compensation, governance and nominating committees. In 2016, just 21 percent of nominating/corporate governance committees were chaired by women, with even lower numbers for audit, compensation and executive committees. Those are the groups that drive decisions of paramount importance, like executive compensation, the determination of who will be nominated for board positions and the hiring/firing of the CEO.

Many boards can benefit from better decision-making, higher returns on equity and other measures of success that diversity provides. And while we’ve seen growth in the representation of women on boards over time, the next step is to move the discussion beyond one of inclusion to one of influence.

For more analysis (and the numbers to back it up) and advice on how organizations can progress faster, specifically in terms of gender diversity, read Darden Professor Kimberly A. Whitler and Deborah A. Henretta’s article “Why the Influence of Women on Boards Still Lags,” contributed to MIT Sloan Management Review.

About the Faculty

Kimberly A. Whitler

Whitler is an authority on marketing, with expertise in marketing strategy, brand management, and marketing performance. Her research centers on understanding how a firm’s marketing performance is affected by its C-suite and board.

A prolific writer as well as researcher, Whitler has authored nearly 100 articles related to C-level marketing management challenges... Learn More

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