Women in Governing Boards 17 Sept 2015

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IRENE Natividad, President of the Global Summit of Women, a 25-year-old institution, is in town in connection with the APEC Women’s Forum that takes place this week. She is an American citizen of Filipino descent who has been a pillar of the feminist movement in the United States as well as served in government positions as a presidential appointee. She is also Chair of the International Corporate Women Directors, a worldwide association of women CEOs.

One of the advocacies of the Global Summit of Women, which is a yearly gathering of top women in business, politics, arts, education, non-governmental work as well as world institutions like the United Nations, Central Banks, humanitarian organizations, is the inclusion of women in governing boards of these agencies and organizations, including governmental bodies like legislatures, executive agencies, the judiciary. The International Corporate Women Directors is an implementing arm.

Irene has all the facts to strengthen this advocacy. There are studies that show (the most recent by Union Bank of Switzerland) that businesses that have women as part of their board are more profitable and more adherent to rules and regulations. They rarely have scandals. They are diversified in leadership as women bring in a unique, practical and progressive point of view, something needed in the management and vision of every organization that wants to stay engaged, relevant and advanced in its mission.

Actually the underlying principle is diversity and inclusiveness. In general terms, every management needs different points of view, varied backgrounds and the dynamics that they engender. Modern business now has the independent director, someone who may not be connected by experience or longevity or even background to the rest of the directors of a board as a member. Governments like ours have seen the advantages and the necessity for putting them on boards. Usually they act as guardians of rules and morals that should be followed when the rest of the board is in the grip of a tunnel-vision-like drive for profits and dispenses with rules and ethics. Independent directors can with common sense inculcate a more balanced, sometimes even a better management style that in the long run gives the organization better results without eschewing the profit motive, or many times even enhancing it.

So, if women are half of the universe, why are they kept out of such boards, or top management? Or, legislatures and government? They are the equivalent of the independent directors. They bring in common sense, they bring in the other half of perspective, they bring in what the board ordinarily does not have. There are competent, knowledgeable, qualified women for board seats, legislative positions and executive and judiciary posts every where even in countries where automatically they are thought not to be because of developmental or political conditions – Afghanistan, Iraq, Egypt, Pakistan, Africa, Latin America, Japan, Korea, Turkey, etc. In fact, I cannot think of any country where they are absent. As Irene Natividad says “All these organizations have to do is just to find them.”

An example that might be noted is that the present prime minister of Japan, Shinzo Abe, whose country is not exactly hospitable to women in high management or present in business corporation boards, has made it a policy to bring women into business. The prime minister must have astutely noted that Japanese business which has been stagnant for decades now needs new blood and a new point of view in the mix of its boards composed of internal directors, managers that come from within the corporation’s ranks who know no other way of thinking but that of their established tradition.

The above was what Irene Natividad brought up to her audience at the Institute of Corporate Directors- sponsored lunch with her as guest speaker. The Institute has training modules for independent directors so as to make them familiar and useful in the business world they enter if they come from outside it. Earlier that morning, Irene led about 60 women CEO’s to ring the opening bell of the Philippine Stock Exchange, giving it a talk about putting more women on corporate boards, something that the Exchange can easily do by including gender diversity in its requirements for companies listed or who want to list.
In the open forum, it was brought up that independent directors and women directors might be against the cultural norms here where family firms prevail. There is always the fear of change or going a different way from the past. Someone even suggested that putting those conditions like gender diversity into business boards would discourage firms from going public.

Family firms have now engaged their women relatives into their management and boards even in this country and even in traditional societies like provincial, Filipino-Chinese, Mom and Pop ventures. That is already a fact. Moreover, some of the women relatives have proven their ability, maybe because they bring in that different feminine point of view? Also, every business that means to progress aspires to go public for raising capital that they will be hard put to provide if they mean to be bigger, more progressive and more profitable. One only has to look at the family firms in this country that have already gone public with nary a regret to see that Philippine business culture, that of the small and family-oriented, kind has changed, had to change if they were to keep up.

If businesses are recalcitrant to go the way of gender diversification on their boards, legislation and/or Stock Exchange or Securities & Exchange Commission rules might help. France has had such and from 13% they have gone in less than a decade to 34% women on their business boards. And not only in so-called traditional businesses where women would be seen to fit. Abig French oil company has six women on their board and is doing very well. The French tradition in the past has been a male-oriented culture in business, specially. But with the legislation in place for gender diversity, they have complied, changed and are now leading in both good management and gender diversity. I would suggest the Philippines follow suit particularly in utility boards where women are the ones most affected by water and power use and rates, and medical and educational facilities.

The Philippines still leads in gender diversity on business boards in Asia with Japan, Korea, China, Taiwan behind. But it can still do better and the countries behind it better wake up to the new and incontrovertible reality, gender diversification works for the betterment of any organization.