Women on Corporate Boards

Several social network analysis studies have been done on the interlocking interlocking nature of corporate boards. Theyrule.net is a particularly interesting site, where visitors can search for individuals, companies, institutions, and instantly get a sense of the interlocked nature of the world’s most powerful corporate leaders. The Corporate Library, a corporate governance research firm in Portland, ME, now part of GMI (GovernanceMetrics International), has also done a lot of work to show the “interlocks” between boards of the world’s most powerful corporations.

This is the so-called “old boys” network. It would be interesting to get a better sense, through social network analysis, of some of the reasons why women are so excluded from this network. Even more interesting would be to better understand how the inclusion of more women in board memberships and executive positions could change the nature of a company’s practices. A 2007 report by Mckinsey & Co. found that companies with a higher proportion of females represented in top management also show better economic performance.

These findings have not gone unnoticed, and the push to incorporate more women on corporate boards has gained traction in the past couple of years. GMI recently launched a Diverse Director Datasource (3D) in order to provide companies with a database of qualified, diverse candidates for upcoming board appointments. A Boston-based non-profit, 2020 Women on Boards has formed around a campaign to increase the percentage of women on corporate boards to 20% by the year 2020. Many European countries have gone so far as to pass legislation requiring that a certain percentage of corporate board members be female by a certain year, 10, 15, or 20 years into the future.

It would be interesting, using social network analysis, to take a look at the interlocking nature of boards as it pertains to women. Are women by nature less “connected” in these circles than men? If so, is connectivity a main driver behind women’s lack of inclusion in corporate boards? What is the effect of the “connectivity” and “interlocks” of boards on economic performance?

Finally, it would be interesting to analyze the women who have made it onto the boards of major corporations and to see what is different about them. Are they more or less connected than their male counterparts? How are they connected to each other? There would be a lot to consider and analyze if given the chance. It would also be worthwhile to analyze GMI’s 3D database and compare the connectivity of the more diverse candidates who perhaps have yet to get a foot in the boardroom door with those already established in the board world.

- HP