In the wake of Leslie Moonves’ departure from CBS, the company has added three women to its board. When issues of harassment at Uber came to light, Arianna Huffington was promptly added to the board. When the behavior of a CEO is in question, it is absolutely right for the board to act with respect to the CEO and to look at themselves. If adding women to a board is done to create a healthy board that deals with all the issues facing a company, not just the financial aspects, it’s a good thing. The timing does call the question about how much ownership the full board takes.
The issue here is not the ability or experience of women who are added to a board during or following a crisis involving the allegations of harassment or unfair practices. It is instead, three-fold. First, are the boards that add women in response to a crisis sincere about making the effort it will take to address the cause? Second, are women directors expected to be the spokespeople, champions, and drivers of change? Third, are the leaders, board and management, clear about what needs to be done and who will do what?
Harassment is not a women’s issue, it is a leadership issue.
What is a board doing beyond adding women to its board? Unless the entire board holds management responsible for creating a culture of decency and performance, attempts by a sub-set of the board will not only not work but will create a division that is destructive. Adding women to a board has many advantages but none of them will be realized if the culture in the boardroom does not change.
There is another reason why adding women to a board without a sincere expectation that they will be full participants is a waste of time and leads to lost credibility. They won’t stay. A highly capable professional person with good character will not remain in a position once they determine that they were put there for reasons of public relations, as proof that a company has an open mind, or to check the ‘has two X chromosomes’ box. The women who have been added to the boards of CBS and Uber are experienced professionals who are no doubt on the lookout for insincerity from their colleagues about why they are there.
Boards oversee management and look at organizational culture but don’t directly manage.
Organizational culture is an important contributor to performance. Cultures that enable the greatest number of talented people to achieve, grow and thrive also outperform on financial measures such as revenue and return on sales as well as customer satisfaction. A board of directors can inquire, challenge, suggest and establish goals but they do not manage. When women are on boards, discussions of non-financial measures are more frequent, allowing the causes of trouble to be apparent much earlier. A board that dismisses conversations about culture as ‘fluffy’ or resists looking at the character and behavior of leaders by tossing it into the ‘soft skills’ heap will find (usually too late) that these things are hard-wired to the bottom line.
While leading a workshop at the NACD Master Class in Newport Beach, CA, recently, there was much discussion about how to understand the culture of a company without intruding upon it. The directors in this conversation are experienced yet remain curious and in a learning mode. The topic was mergers and acquisitions but there was great interest in talking about culture because these directors know that it is material. Ignore it at your peril. Dealing with issues of organizational culture, at the board level or elsewhere, is best done to prevent crisis, not in the midst of one.
Crisis leads to protectionism.
The usual responses to a crisis are often to protect reputations and brand. Many leaders reach out for help from lawyers and crisis communication consultants. Both are needed yet either or both can get in the way of doing what needs to be done. Directors need to reject advice to sidestep real issues or engage in mealy-mouthed statements about values and commitment.
What needs to happen in a crisis?
First, when you are in a crisis, know you are. Denial and over-confidence are not going to help you. It’s time to think systemically. Mary Barra did this when she became CEO at GM. The Few Bad Apples Theory didn’t fly with her.
Second, act like you know. Admit it and show understanding for the impact of the issues coming to light. When female Merrill Lynch consultants complained about harassment, many were stone-walled. A former broker reports being told, “If you can’t stand the heat, get out of the kitchen” in response to her complaints. Several lawsuits against the firm cost them dearly, including a class-action suit that resulted in payments of $100 million.
Third, don’t settle for window dressing. This is easier said than done because virtually no leader says, “get me some window dressing.” It happens out of the human need to protect oneself and one’s interests and that of colleagues. It is for precisely this reason that the usual and customary advice that addresses only the immediate issue does not change the cultures that allow serious issues to continue unchallenged, sometimes for decades.
Adding women to corporate boards is good for all kinds of reasons but not as a way to quell concerns about harassment. There is only so much a director can do. Rona Wells, Executive Director of OnBoard, an Atlanta-based group that advocates to get more women on corporate boards and in executive leadership, sums it up well. She says, “Adding qualified women to a board is always a good idea. Boards with women directors have a number of advantages over those that do not and three or more is ideal. However, the optics of adding women to a board as a way to show that a company is addressing issues of harassment, aren’t great.”