Gender Diversity in the Boardroom

February 22, 2019

Joshua C. Rowland

CEO, Lead Bank

 

Easier than it looks…

Any self-respecting businessman prides himself on his attention to numbers; he is “data-driven”, a “numbers guy.” [The use of the masculine personal pronoun is utterly intentional].  He believes generally, if not in practice, in financial diversification to ensure corporate resilience – mitigating risk by spreading assets or efforts across multiple classes, such as in stock portfolio theory.  He believes in strategic plans, citing the axiom that you must commit to measurable goals in order to make progress.

And yet, it appears that none of these core business principles is employed to define, let alone achieve, meaningful progress on gender inclusion in corporations or on their governing boards in the United States.  The #metoo movement is only the latest (and unlikely the last) irruption of anger with a multi-generational complacency about the way that women are treated in the workplace – whether in recruitment, retention, pay, or in the conditions of their work.  What’s so discouraging about the persistence of this gap between “sound” conventional business rules and actual practice is that we identified long, long ago the need and the societal benefits for greater, more complete participation by women in the financial affairs and decision-making activities of their communities.  For example, we recognize the benefit and power of micro-loans to women entrepreneurs in the developing world as a tool to improve community and family welfare by enabling women to control the financial levers in their lives.

There’s plenty of research that proves the financial benefit for corporations that make progress in gender inclusion. Christine Lagard, the Managing Director of the International Monetary Fund, writing in the 2019 preview edition of The Economist, cites multiple studies showing the bottom-line benefits of effective inclusion: adding one woman to a company’s senior management or board increases the return on assets by 8-13 basis points (hundredths of a percent); an IMF study shows that a higher percentage of women on the boards of banks is associated with greater resilience and stability.  These results are echoed in studies looking at, among other things, the risk-adjusted financial returns of women investors.

And the beauty of it? It’s incredibly simple for a company to get the benefit of financial improvement by adding a woman to a corporate board: add a woman you know to your corporate board.

This is not a joke, and my answer does not over-simplify the task.  Nor do I wish to suggest that merely adding a token woman to a board is the same thing as meaningful inclusion and participation by women in leadership. What I do want to challenge here is the apparent roadblock in even considering women for these key leadership roles.  The proposition that there are not enough qualified women to serve in these roles is patently false.

Just this past year, Lead Bank became one of the only, if not the only, community banks in the United States with women comprising a majority of independent directors (those directors not employed by the company.) In total, women make up half of all directors of the Bank.

Our Board is led by our Chairman and majority owner, Sarah Rowland.  Maureen Mahoney, the Chief of Staff of the current, and former Mayor of Kansas City, Kansas, Ursula Terrasi, a banker-turned-successful retail entrepreneur, were joined this year by Bridgette Williams, the first woman and person of color to serve as the Executive Director of the Kansas City Heavy Constructors Organization of Kansas City, continuing her trailblazing career after serving as the first woman and first person of color in the nation’s history to be a President of an AFL-CIO Chapter. Lead Bank is fortunate that these intelligent, resourceful leaders have chosen to join our team. 

But one thing needs to be made clear: Lead Bank did not “discover” these great leaders. 

Sarah, Bridgette, Ursula, and Maureen have been public leaders in Kansas City for decades.  They have served clients, customers, members, families and their communities in business roles, on governmental agencies, and as volunteers. They have earned accolades, litigated disputes, made profits, won elections, marketed, organized, campaigned, lobbied, hired and fired; they make decisions every day that affect the well-being of our community; in short, they are influential. They are exactly the kinds of people that corporations always seek out to serve in governance roles.

So how did we do it? We asked them.

There are thousands of women in Kansas City alone with just these credentials, influencers who can improve corporate results and sustainability.  They serve on the boards of volunteer agencies – indeed, most volunteer organizations with multi-million budgets are run entirely by women serving in executive or director roles; these leaders have cut their teeth on business problems that make running a bank look easy: how do you run a multi-million organization which serves thousands of people, managing hundreds of volunteers to deliver immediate crisis assistance every day (no holidays!) every year, yet receives its revenue long after the fact in the form of highly detailed, picayune, government grants and private fund raising? Talk about a business challenge. (A shout out to Julie Donelon, Executive Director of MOCSA, another amazing Kansas City “business” leader.)

Ask a client or customer to serve on your board. What’s the risk? That you cannot explain or justify how you make money? To me, that seems like the very reason to have a good, long-time customer sit on the board. 

Need advanced, technical know-how? What about inviting a female faculty member from a local college or university with subject matter expertise to serve? There are many, many such women leaders who could make our corporate life better, and yet we don’t see them even though they are right in front of us.

One fallacy stands in our way: the notion that there is something so rarerified or abstruse about our companies that only years of work in that field can justify bringing someone on the board of directors. Whether this is true or not, the fact that most current boards of directors, male-dominated as they are, are not comprised of technical experts suggests that companies don’t work that way.  In fact, this is as it should be: boards exist to provide sound governance, not to do product engineering. Having strong, capable, and articulate leaders who can envision and work on the long-term best interests of the company – whether public or private – is the proper test.  Women are proving that skill every day, everywhere around us.

The time is now to open our eyes to the potential of inclusion and to the simple paths to achieving it. You don’t need a national search or a consultant. It’s a local thing, so here’s a local roadmap: check all the websites for the local organizations and non-profits that you support. Think about the stores you and your family love and patronize. Talk to their women leaders and owners about joining your organization. Ask your elected officials if they can recommend someone. I guarantee you: it’s so simple, even a banker can do it.

 

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