Is Diversity Important for Corporate Boards? Men Say Not Really…
Although diversity has been proven to stimulate innovation, enhance creativity, and lead to better decision-making and problem-solving, there is still a problem with lack of diversity (in terms of both gender and race) in the upper echelons of corporate life.
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Women are actually underrepresented on every rung of the corporate ladder, according to the 2015 Women in the Workplace study conducted by LeanIn.org and McKinsey & Company. Women make up about 45 percent of entry-level corporate positions, but only 17 percent of the in the c-suite is female.
Still, despite these numbers, there continues be a lack of understanding about the problem itself. According to the same study, although 70 percent of men surveyed reported feeling that gender diversity was important, only 12 percent said that women had fewer opportunities than men.
One reason the gender pay gap is closing at a snail’s pace could be that men, at the highest levels of corporate life, those sitting on corporate boards, don’t seem to recognize the importance of diversity. According to PwC’s Annual Corporate Directors Survey, which polled more than 700 board members for its report, only 35 percent of men felt that having female board members was “very important” compared with 63 percent of women. When polled about racial diversity, the numbers were even worse. Forty-six percent of female directors reported that it was highly valuable to have diverse boards, but only 27 percent of men felt the same.
More specifically, 80 percent of women surveyed felt that board diversity leads to “enhanced board effectiveness” but only 40 percent of men felt it did. Seventy-four percent of women felt that diversity leads to enhanced company performance, while only 31 percent of men were in agreement.
The good news is that, overall, 95 percent of those surveyed said that diversity was at least “somewhat” important. Also, 70 percent also said that they at least “somewhat” believe that there are obstacles in the way of increasing the diversity of their boards.
“They cite a limited pool of diverse director candidates as a significant obstacle,” the report states. “Less than one quarter very much believe there is a sufficient number of qualified diverse candidates.”
Interestingly, larger companies seemed to have a better understanding of the importance of cultivating diversity on their boards than smaller ones did. Sixty-seven percent of mega-cap company directors think that diversity is very important, while only 32 percent of directors at micro-cap companies agreed.
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