The XX Factor in the Boardroom: Why Women Make Better Directors

By Christopher J. Clarke

This article contains dangerous ideas, based on gender differences. Unlike the recent controversy at Harvard University, the danger here is not to the author, but rather to the dominant males in corporate boardrooms. Gender differences at work reflect millions of years of evolution. During this time, men and women developed distinct cognitive and behavioral traits to suit their separate roles. Because of these differences, males have been able to dominate and lead in business—until now. Because of changes in the needs of business, we are entering an era where the female may be better suited to leadership and governance roles and will become increasingly more prevalent in both management and the boardroom.


Let us go back millions of years. Imagine a time when your ancestor and leader of the troop was a dominant male ape. Larger than the females, whose favors he had to fight for, he was supported by cronies and cast all rivals out of the troop. As we share 98 percent of our genes with the great apes, it is no surprise that in today’s boardrooms we can observe much similar behavior. The boards of Enron,World-Com, Parmalat, Tyco, Hollinger, and AIG all seem to share characteristics still easily observed in primates today. Dominant males, backed by predominantly male boards, have led other companies that have also suffered trauma, for example Disney, Citibank, and Marconi. The male mandrill, who contests and gains leadership, becomes gorgeous—sporting exaggerated coiffure and brilliant colors—as he struts his stuff. Donald Trump comes to mind. The corporate jets, executive suites, and lifestyles of today’s CEOs are surely a reflection of evolution. Extra hormones and testosterone flow into new human leaders, as they do into related species, to drive this behavior.

Fast forward to 10,000 years ago.We are now hunter-gatherers. The males do most of the hunting. Their brains have evolved to identify and target prey. Their bodies evolved to run it down and butcher it. Through warring with other tribes, they have developed pride in the military virtues, a language of the hunt, combat, and male bonding.Today, men speak of business in the boardroom with sporting and military analogies: we “attack” our “entrenched” competitors or “defend” our distribution channels. We “capture” market share.We use “strategies” and “tactics.” We want to strengthen our “bench” by picking “winning players.”

Though business has developed and been revolutionized only since the 18th century, we are still hunter-gathers. Bill Gates and Warren Buffett are of the same species as the Kalahari Bushman, the Aboriginal tribesman of Iranjaya, or the Amerindian of the Amazon Basin.With a different experience and birthplace, Gates and Buffett could have been hunting naked and the aboriginals could be the chairmen of great boards. Perhaps they are.

As Arthur Levitt wrote in the Wall Street Journal in March 2005, “The Imperial CEO is no more.” He claims a permanent culture change in U.S. business. If our evolution is ended, how then can boards adapt to the postimperial CEO era, with its increasingly complex balancing of the needs of customers, employees, stockholders, suppliers, and regulators? This requires multitasking, team building, and communications skills, which begin to stretch our dominant males to their limits.

Fortunately, there is another story. The era of the female board member is dawning. Historically, while the males were engaged in hunting and brute combat, the females were evolving differently. They gathered, kept the hearth, raised the young, and learned how to deal with their larger and threatening mates. They evolved superior multitasking, language, and sensing abilities. As anyone who has been to a farmers’ market in the developing world will attest, they also gained well-developed trading, selling, and financial skills. From the hills of Vietnam to the markets of rural Africa, women dominate in these markets. It should be no surprise that female-led entrepreneurial businesses have better survival rates than those led by males.

In early industrial society, male bonding and aggression kept the females managing the hearth or at least out of leadership roles. The so-called robber barons—Carnegie, Rockefeller, Vanderbilt, and J. P. Morgan—could only have been male. During the mass mobilizations of two world wars women were drafted to conduct male tasks. They did them well. Meantime, female emancipation and an increased political voice ultimately led to anti-discrimination laws in many countries.

Today’s Boardrooms

Let us turn to today’s boardrooms. The good news is that there are only three all-male boards in the top 100 boards by market cap in the U.S. On the other hand, in the top 100 U.S. corporations by capitalization, Boyden analysis reveals only 19 new female appointments were made in the 12 months ending in March 2005. Carly Fiorina was the highest-ranked female CEO and had a precipitous fall accompanied by much quiet male schadenfreude. How can we argue that the dawn of the female board member is nigh?

Almost every board-search brief now specifies that candidates must be from diverse backgrounds. From discussions with members of nomination committees, we observe that this is partly driven by the law.However, it is increasingly driven by recognition that boards with diverse composition are less likely to take a supine stance to the dominant CEO and will bring broader perspectives and skills into the boardroom. As one nomination committee member recently put it, “Reality is that our board was a cozy club.We were friends and served on interlocking boards. This is no longer acceptable. Now is a good time to bring in women, who can break the old boy atmosphere.”

Trends in Boardrooms

Professor Susan Vinnicombe of Cranfield Business School has found a number of relevant trends in her 2004 research into women and the Financial Times top 100 U.K. boards. The number of women on U.K. boards is increasing. There were 24 new female directors in 2004 versus only 13 in 2002. She developed a scoring method to measure compliance with good governance practice. Boards with female directors scored significantly higher on good governance. Furthermore, the 69 companies with women on their boards had a weighted average return on investment of 13.8 percent, versus 9.9 percent for the 31 all-male boards.

On a broader front, there is increasing evidence that women may have superior skills relevant to evaluating people and their veracity. Brain scans show that the male brain has to work much harder to evaluate emotions in faces and takes longer to do so. Similarly, women recognize known faces faster and with greater accuracy. If you go to any conference of either executive searchers or HR heads these days, both will have very high percentages of females and, at least in the case of the search industry, they are increasingly among the top performers. In the board context, this is essential for nomination committees, as well as in evaluating executives presenting to the board. Superior insights into the aggressive, fraudulent behavior of errant CEOs might have prevented some of the recent corporate scandals.


Why the Small Pool of Women Directors?

Why then are there still so few women on boards? The glass ceiling is a chicken-and-egg problem. Boyden’s ongoing research into board nominating committees suggests a strong predilection for appointing those with public CEO experience. As there are few female CEOs (now none in the top 50 U.S. firms), this becomes a difficult problem. British psychologists Alex Haslam and Michelle Ryan report that women are recruited into precarious roles with higher risks of failure: “They are on the edge of a glass cliff.” This serves to reduce the female cadre making it to CEO. Fortunately, Prof. Vinnicombe has found that in the U.K., at least, there is an increasingly wider net being cast, and female board members are increasingly being drawn from non-CEO roles and the non-public sector. According to Vinnicombe, 46 percent of new top 100 firm non-executive females in 2004 have government experience. Peter Drucker once said that nonprofit CEOs are better managers, because they have to motivate and manage volunteers.We could well see more females from nonprofits in public boardrooms.

Catalyst reports that 69 percent of women see commitment to family relationships as a barrier to advancement at work. The chairman of a U.S. nominating committee recently said, “We are constantly on the lookout for female board members, but there is no doubt that the interruption of careers to raise their children holds them back in experience and advancement and reduces the viable pool of candidates.”

However Brenda Barnes, the CEO of Sara Lee, may show the way forward. For six years, she avoided executive jobs to raise her family. During this time, she served on a number of boards in non-executive roles, including Avon, Sears, The New York Times, and Staples. This may be an example for board nominating committees to follow. However, she remains a minority. In the March Harvard Business Review, Sylvia Hewlett and Carolyn Luce related that of three MBA classes at Harvard, only 38 percent of women went on to full-time careers. Those taking three or more years out go back at a reduction in salary of 37 percent.


Another reason why there may be a small pool of CEOs to draw on for non-executive positions is the female tendency to wait to be recognized. This is well covered in “Nice Girls Don’t Get the Corner Office” by Lois Frankel. She proposes that coaching women to showcase their achievements and ask for bonuses, raises, and promotions is a way to fix this major difference from average male behavior.

So where do we go from here? Professor Goldman and others tell us that leaders need emotional intelligence. Key characteristics include self-awareness, understanding the needs of others, and care for the team. The old fashioned, 800-pound-gorilla-type CEO and his supportive board had precious few of these characteristics.Women have special strengths in all of these areas.The modern CEO and board need to be heavy on these qualities; because of the limited number of female CEOs, nominating committees need to look wider than CEOs of comparably sized companies. If they do not, they could be left behind in board effectiveness. As for us males, we can either accept that women have much to offer and do our best to manage our simian nature, or we are likely to be seen as anachronisms.