Greater female presence on boards is a disease!

Now there’s a headline to get you reading further…

It’s actually true, but in a wholly positive sense.

It is the major finding of significant research into understanding the primary drivers behind women’s participation on boards across Australia’s ASX200 companies.

Conducted against the disappointing backdrop of fewer than hoped for Australian companies reaching the tipping point of 30 per cent female representation – where it stops being tokenism and starts making a real difference in areas like innovation – by the end of FY 2018, the research found that the only significant predictor that boards hit the 30 per cent target is that they have a director who sits on another board that has already achieved the milestone.
This is made even more likely when the director has an affiliation with the Australian Institute of Company Directors, leading the team of academics from Melbourne’s Swinburne University of Technology to conclude that factors like the industry a company operates in, its market capitalisation, and even the presence of a ‘male champion of change’ on the board count for little when tested against the power of propinquity.

They found that when there is closeness between members of boards their camaraderie is akin to an infectious disease. It ignites a spreading of ideas and practices that deliver overwhelmingly positive results when it comes to the recruitment of women to boards.

The authors call it ‘network contagion’ and as I mentioned earlier, they discovered that where there is contact between one board that has attained the 30 per cent mark and another featuring just one female member, the lagging board soon realises that it is not so shocking to have a few more women around.

Either overtly or covertly, pressure is applied to up its female representation. And with 172 of our top 200 listed companies linked through shared directors, it’s a little disappointing that the network contagion effect hasn’t reached epidemic proportions.

We should be promoting a process of social influence where shared directors transmit – much like the biological transmission of a disease from one person to another – viewpoints from one board to another.

The secret to success, then, is to get more boards with the 30 percent – or at least three female directors – tipping point to interact more vigorously with boards struggling to attain that threshold.

As the authors so succinctly put it, we need to identify the diseased and anyone who has had contact with them and, rather than isolate them as one would in a medical context, intensify their exposure!

Until next time,

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