<div>I pick a few key underlying issues in this discussion between the group of women in this case study. These issues seem to reflect the mindset of companies and also the mindset of women around boards, directors and women directors — all of which are key to the subject matter of women on boards.<br /><br />How directors are appointed and what criteria seem to be applied when it comes to selecting women directors. <br /><br />These women experience an underlying bias or different criteria for them versus men candidates. <br /><br />Corporate governance being the primary role of the board and aspects like CSR being considered ‘not critical’ hence women relegated to them. Again an underlying bias. Let me deal with the second issue first as it provides a context for the first issue.<br /><br />The Role: Boards are not only meant for corporate governance, their role is beyond.</div><div> </div><ul><li>Boards are trustees for all key stakeholders and are beyond shareholders. Hence there needs to be a visible shift in the purpose of the corporate entity to build stakeholder value while creating value for the shareholder(s).</li><li>As corporate governance is becoming more challenging, companies do need boards to manage effective corporate governance easily while also guiding and reviewing strategy and value creation for all key stakeholders.</li><li>Specific elements of the role of an effective board are: to establish policies, to make significant and strategic decisions, and to oversee the organisation’s activity.</li></ul><div><br />The Mix: Board composition and quality of directors is a big, if not the biggest, factor that enables boards to be effective. Boards needs to have a diverse mix of skills and experience, that way they can think widely and innovatively to deal effectively with varied challenges. While what form and level of diversity is appropriate is based an organisation’s circumstances, what is clear is that boards should assemble a group of directors that together comprise a range of skills and experience that will best assist the organisation achieving its goals. More and more boards are assembling wide ranging backgrounds to create genuine diversity — academicians, not for profit, artists, customer group representatives apart from business leaders.<br /><br /><strong>The Selection: </strong>Being a good board director is not everyone’s cup of tea. So who is a good board director candidate?<br /><br />Someone with prior board experience? That cannot be the criteria. If applied, this criterion can make boards lose access to a vibrant and valid candidate pool of senior executive leadership ready to join and refresh the pool of directors. Women senior leaders are an integral part of this pool.</div><ul><li>However, board directors do need to bring a breadth of knowledge, skills along with attitude and personal characteristics. Some of it is contextual to the company’s business and strategy while much of it is about being a capable director leader.</li><li>When we, at Amrop, search for board directors, there is a detailed criteria developed, which is designed to recognise right senior leaders inside and outside boards. For example, knowledge of business risk relevant to the board role can be with executive experience: in risk management; insurance negotiations; people, product and property safety; and the related delineation of risk. Similarly, to evaluate the grasp of governance, we use criteria of senior executive role in organisations that are noted for their standing in corporate governance. </li><li>So, it goes without saying that if driven in a structured and well-intentioned manner, there are enough ‘board ready’ women leaders.</li></ul><div><br /><strong>Reservation and Mediocrity, Elegant Worry:</strong> Will quotas put limits and will men-oriented boards stop at ‘one woman’ quota? I do not think so. Companies with right orientation on building boards will seek good directors irrespective of gender quota. Will quota promote mediocrity? This assumes that we already do not have mediocre boards and mediocre board members. So, issue of mediocrity at this stage is a larger one. <br />In my work on boards in India, a few home truths have surfaced:<br />There are enough average-to-below -average male directors.</div><div> </div><ul><li>Over 80 per cent of boards do not focus on building a quality board and hence quality of directors. Most think of board directors as buddies, trophies or a combination. </li></ul><div><br /><em>The writer is the founding and Managing Partner at Amrop India</em><br /><br /><div>(This story was published in BW | Businessworld Issue Dated 01-06-2015)</div></div>
