California will be the first state requiring public companies to meet gender quotas for their boards of directors, and women in the payments industry see the move as positive — with some caveats.
By the end of next year, companies based in California must have at least two women out of five directors on their boards, and three women on seven-member boards in accordance with
“Unless we set benchmarks and hold people accountable, we aren’t likely to see changes in the landscape where men dominate boards of directors,” Martina King, the CEO of Featurespace, said last week in Atlanta at the annual meeting of Women’s Network in Electronic Transactions, or Wnet.
Featurespace, a U.K. company that markets tools to spot payments fraud to key clients including TSYS and WorldPay, happens to have just one woman — the CEO — on its nine-member board.
“When people talk about ‘the club’ of men running companies, in the U.K. it absolutely exists,” King, a 2018 PaymentsSource
"Executives sometimes aren’t able to open their eyes to see changes coming, but leadership and board member diversity is essential for companies to thrive," King added.
Around the world, more companies are adding women in leadership roles and on boards because they realize it improves their results, she noted.
Female board representation has grown steadily over the last decade, surging in the last five years, according to a recent report on board diversity produced by ISS Analytics, but fewer than one in four board members in the U.S. are women.
The proportion of women on boards of S&P 500 companies rose to 22 percent last year, up from 16 percent in 2011; percentages were slightly lower for midcap and small-cap companies, the organization said.
The payments industry has much work to do to prepare women for emerging leadership roles at companies and on boards, panelists agreed.
“None of us could have predicted the technology and developments that are driving the payments industry, and now we must find people in a position to lead,” said Linda Perry, a longtime Visa executive who co-founded Wnet and for many years has championed the cause of
Pattye Moore, a longtime executive who rose to be president of the fast-food brand Sonic Corp. and is now nonexecutive chairman of the board of Red Robin Gourmet Burgers, isn’t sure laws requiring women to serve on corporate boards is the best solution to drive leadership diversity.
“I’m not a big fan of California’s bill,” Moore said, noting that the percentage of women on corporate boards has been steadily rising across the U.S. without legal intervention.
“I’m fearful this type of legislation could create resentment and uneasiness that just because it’s a requirement to add women to boards it’s in a company’s best interests,” Moore said.
Moore, who was on Sonic’s board of directors for six years and Red Robin’s for 11 years, authored the leadership book, “Confessions from the Corner Office.” She said when qualified women join corporate boards, the effect is powerful.
“Boards set policies and drive corporate culture, and having women on boards can be transformative,” Moore said.
What makes a person a good board member is having a wide spectrum for her own thinking and cultural awareness, along with being inquisitive, listening, and having the courage to ask questions and speak up, according to Moore.
Corporations are quickly adding more women to boards without intervention, but if the trend stalls, she would support broader legislation for gender quotas.
“If we aren’t seeing a lot of progress in parity between men and women on boards within five years, maybe it will be time to legislate quotas,” Moore said.
The number of women on corporate boards worldwide is moving “directionally” to include more women for many reasons, said Matrice Ellis-Kirk, a managing director with the board advisory and consulting firm RSR Partners.
“Institutional investors are driving demand for women to serve on boards. They’re questioning the tenure and age of existing board members and looking for more diversity," Ellis-Kirk said. "Because how can you be selling to women if you have no women on your board?”
Diversity of gender as well as ethnicity and geography is critical to the composition of an effective corporate board, where members challenge one another’s knowledge and viewpoints in setting a company’s policies and strategy, according to Ellis-Kirk.
“The numbers of women serving on corporate boards is definitely increasing and this will continue because companies are seeing positive results,” she said.
Women interested in joining corporate boards can begin by sharing their intentions with other people, Ellis-Kirk said.
“Network, be purposeful, talk to CEOs and ask for help putting together your personal strategy, and demystify the process. Realize that companies are looking for leaders,” she said.
Dive into a role that’s uncomfortable, said Moore, who began her rise working at Sonic’s advertising agency, advancing to senior executive roles in marketing and brand development before being named president in 2002. In addition to Red Robin, she’s a board director for QuikTrip Corp., Giant Impact and ONE Gas.
“Get out there and volunteer, join committees at companies and nonprofits, and find out what leaders do," she said. "Take on roles you’re not comfortable with — being a treasurer was a huge stretch for me — but this is how you move forward.”
