Most experts agree that board diversity needs to change but do not necessarily agree how.
Kudos to California, where the state governor, Jerry Brown, recently signed into law new requirements for companies headquartered in the state to include more women on their boards. The law will force heavyweights such as Apple, Facebook, Tesla, and Google (Alphabet) to revamp their boards to comply.
Supporters believe increasing board diversity is important for both social and economic reasons; that a more diverse pool of directors creates a better board, with different and more innovative perspectives. Opponents of the law question its efficacy, saying it’s like treating a symptom rather than the disease. But because it’s human behaviour that we’re trying to change in this case, treating the symptom can be a big first step towards treating the disease.
Specifically, all companies in California will be required to have at least one woman on their board by 2019. Boards with five or fewer directors will need two female directors by 2021 and larger boards will need three. Non-compliant firms would be subject to (relatively small) fines.
To assess the scope of the change, let’s review the statistics on diversity in the upper rank of corporations. In 2017, for the 1,500 largest US companies (all board statistics are my own, using data from advisory firm ISS):
5% of firms have a female CEO.
4% of firms have a female board chair. 16% of directors are women.
15% of audit and compensation committees have a female chair.
Female directors own 75% the amount of stock that male directors own; this is independent of their tenure on the board.
7% of boards have at least three women and 2% have at least four women; all 1,500 boards have at least three men.
Women account for 57% of all college degrees and 47% of all business degrees in the US.
exercising influence
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Building A Quality Culture
A strong company culture defined by its values, beliefs, and behaviors, has a profound impact on its products and services. More so in today’s VUCA world, where to stay relevant and maintain a competitive edge, it is critical for organizations to build a culture that focuses on quality. Suresh Lulla, author of Quality Fables, elucidates through significant examples how creating a culture of quality is imperative to driving success and productivity.
Customers For Life
The history of General Motors in India can be traced back to the 1920s, when it became the first automotive company to set up an assembly plant in the country. The relationship since then has not been as fruitful as GM would have hoped. GM’s flagship brand, Chevrolet, was introduced in India to build upon the success of the popular Opel marque. However, success has been fleeting at best—an issue that GM India is determined to rectify. It aims to do so by adopting a two-pronged approach: using customer feedback to influence product development, and delivering a superior sales-to-service experience.
The Digital Shift
… technology will radically disrupt HR in the near future. Indeed, it is already changing the way HR works and the role it plays and opening the door to a new type of “digital HR” function.1 The rise of digital and social media is changing the dynamics of HR and creating new ways of hiring, engaging, and retaining employees.
The Story Of Telling
“The best brands are built on great stories,”* this remark by Ian Rowden best captures the strategy of diligent brand building. Much more than attractive logos or the products themselves, what builds a brand is how successfully a story is woven around it. Brand marketers have to be good storytellers indeed.
Complexity Is Simpler Than You Think
Kay Kendall and Glenn Bodinson, authors of Leading the Malcolm Baldrige Way, shatter myths about excellence models such as Baldrige and EFQM.
Proponents of Isolation Never Become Victors
Multilateralism in the political and economic space has always led to frameworks that favor the mighty. WTO was no exception. With agriculture kept out of its purview, it could never become a truly fair and free trading system. China was the only large emerging economy that exploited relative openness in low-cost manufactured goods to take full advantage of the system. Other emerging economies could at best garner minor gains.
A History Lesson (From Year One) for Trump and the Brexit Crowd: Isolationism Has Never Worked!
Professor Stephane Garelli on growing isolationism.
A Win-Win Game
Business is not a sport where some stakeholder has to lose or fare badly for others to do well. Building an atmosphere of trust and transparency between all stakeholders will help companies retain them even during adverse times.
A Sustainable Model
With a total market value of $4.3 trillion and an employment base of at least 1.3 million direct employees and millions of others indirectly employed, platforms have become an important economic force.*Companies today are constantly looking for ways to build platforms—Infosys Ltd announced its plans of monetizing its platforms to make them a $2 billion business by March 2021. But are all platform businesses successful?
Custom Made
…three in four consumers said they receive too many emails from brands, and one-fifth said they could not handle the current volume…69 per cent have ‘unfollowed’ brands on social media, closed their accounts or cancelled subscriptions.*In these times, when the market is flooded with products and services, the most efficent way to engage customers is to offer them customized content. To achieve this, brands need to focus on observing the nuances of individual preferences.
