Boardroom parity in the U.S. by 2022: for gender diversity, that is. And yes, it can happen--without quotas. Here's how.

• Author: Ellig, Janice Reals
• Position: BOARD COMPOSITION

ASEISMIC SHIFT is occurring in board-rooms around the world that will arguably have greater impact on how corporations are run than any other single development in the history of publicly traded companies. This shift: requiring more women on corporate boards.

This shift began in Norway nearly 10 years ago, and is now mandated in more than 16 countries. Through legislation or strong government guidelines, these countries are calling for 30% to 40% female representation on public company boards. In just five years Norway went from 7% to 40% representation. (See "It Happened in Norway," the cover feature of the Third Quarter 2010 issue of Directors & Boards in which a Norwegian Minister offered a case study of the implementation of this program.)

Though women occupy only 16% of the Fortune 500 board seats, we believe that in the U.S. it is possible to achieve the goal of parity on boards within 10 years--with quality appointments, the commitment of the board, and without quotas. Norway did it (albeit with quotas) with a smaller pipeline of female talent. Why not in the U.S. by 202

Here is how it can be done: by celebrating companies with diverse boards, creating a database of CEO-sponsored board-ready women, and filling new/vacant positions with qualified diverse candidates.

Step One: Celebrating gender diversity of U.S. boards

Over 250 people spilled onto the floor of the New York Stock Exchange early on the morning of Nov. 2, 2011, to celebrate and showcase publicly traded Fortune 1000 companies in New York, New Jersey and Connecticut that have 20% or more women on their boards. Out of a possible 178 companies, 52 were honored (see box on page 29). This inaugural "Breakfast of Corporate Champions" hosted by the Women's Forum of New York, an organization of over 450 of New York City's top women leaders, drew mainly board directors. Nearly 40% of attendees were men.

Each honored CEO/board chair submitted a quote, displayed at the breakfast, of why having women on their board was a "strategic business imperative." (These quotes are now pasted on the www.womensforumny.org web site.) Such great tone at the top was not just talk--it was a call to action:

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* Says William E. McCracken, CEO of CA Inc.: "Boards with women members simply perform better. Diverse viewpoints and experiences make for better dialogue and smarter decisions."

* Says Klaus Kleinfeld, chairman and CEO of Alcoa Inc.: "Alcoa's women board members--Judy Gueron, Kathryn Fuller and Pat Russo--have greatly impacted Alcoa's success. Their broad experience and unique perspectives have distinguished them as outstanding leaders and valued role models at Alcoa."

* Says Jeffrey R. Immelt, chairman and CEO of General Electric Co.: "There is an easy formula that should guide any organization wondering whether they need more women on their board of directors: representation equals results."

At the event, a panel of six CEOs/board directors (four men and two women) discussed "Women on Boards: Why Now and How." A few takeaways--confirmed by multiple studies--included: diversity inoculates boards against groupthink; more heterogeneous groups, even if less skilled, make better decisions; and companies with greater gender diversity on boards, on average, outperform those with fewer female board directors. Also, women tend to listen more, raise questions without assuming that they are right, and reach decisions by seeking out others' opinions.

It is a strategic business imperative to tap into the existing rich pipeline of women and...