The question of whether more women belong in corporate boardrooms is no longer a gender equity issue. It's an economic growth strategy.
This was a repeated theme at the "Women as Entrepreneurs, Consumers and Agents of Change" forum, hosted April 13, 2012 by the Robert H. Smith School of Business at the Ronald Reagan International Trade Center in Washington, D.C.
Experts representing academia, government and business discussed the way women are thriving in public and private sector leadership roles, including those who have capitalized on microfinance and governmental reforms designed to spur developing economies.
Participants also discussed whether women have sufficient access to leadership roles in U.S. companies and other established economies.
Keynote speaker and former Hewlett Packard CEO Carly Fiorina MBA ’80 epitomized the theme and conversation. She recounted witnessing entrepreneurial success by women in underdeveloped economies and her climb from small company secretary to the first female CEO of a Fortune 20 company. Before leading HP from 1999 to 2005, she leveraged her Smith degree and other educational and professional experience to almost 20 years of advancing through various leadership roles with AT&T and Lucent Technologies. More recently, as chairman and CEO of Carly Fiorina Enterprises, she has been a best-selling author, sought-after speaker, business commentator and strategic advisor.
Entrepreneurs in Developing Economies
In India, women are increasingly taking on leadership roles and improving their communities because electoral quotas require females to occupy 40 percent of village council seats, according to a recent study led by Harvard public policy professor Rohini Pande, who detailed the findings as opening speaker.
India also is recognized as the late 1970s birthplace of modern-day village banking by which heads of households -- predominately women -- in developing economies administer small loans to prospective entrepreneurs in their communities from funds seeded by institutions such as the Foundation for International Community Assistance (FINCA).
FINCA President and CEO Rupert Scofield said this form of microfinancing has increasingly helped women thrive as entrepreneurs around the globe, especially in sub-Saharan Africa. He gave an example of a Tanzania woman borrowing $1,500 to open a bakery in 2004 with two employees. Now, she produces 10,000 loaves of bread daily with 60 employees and has subsequently opened a market for local suppliers to her business.
Fiorina said she foresaw such a phenomenon as a 14-year-old in Ghana, where she and her family resided briefly.
"The women were incredible multi-taskers," she said. "They literally carried babies on their backs and water on their heads, and at the market they stood behind the stalls and bargained furiously to make money for their families. ... They were the commercial underpinning of their communities. They did it all. It made a huge impression on me."
She said the experience helped inspire her to steer HP philanthropic initiatives for microbusinesses in economies, like India, where in the early 2000s, the company equipped a pair of local women with a solar-powered digital photography kit to photograph citizens in small, rural communities for national ID cards. Fiorina said the women quickly identified a business opportunity and expanded the service that has employed up to 300 roving photographers to shoot family portraits, weddings and other family and community events.
"These two women just did not grow their business,” Fiorina said. “They returned home and used some of the proceeds to begin an education fund for their extended families."
Such opportunity has not reached all regions, especially Asia Pacific. The U.N. recently reported that region’s GDP is shortchanged by $43 to 47 million yearly due to a lack of participation by women, said Wendy Yu, representing the State Department’s Global Women’s Issues Office. In response, the State Department convened a summit in 2011, resulting in 21 Asian Pacific economic ministers signing a pact – the San Francisco Declaration – to promote women's access to markets, capital, capacity and skill-building, and leadership.
Along with institutional reform, information technology is another equalizer. “Any woman with a skill can find a market. Everyone has an opportunity to reach someone who could be willing to take a chance on them,” said Fiorina. "I do not say this with any kind of naiveté. It is a cruel world out there for too many women. And yet, for the first time in human history, history is on the side of the individual, not on the side of power.”
Leadership in Corporate Boardrooms
Such optimism and success in developing economies should translate to the boardrooms of corporate America where women remain underrepresented, said Dan Konigsburg, managing director and global leader for Deloitte's Global Center for Corporate Governance.
He said women on corporate boards range from 3 percent in Italy to approaching 40 percent in Holland, where a recent legislated quota calls for that percentage of representation by both genders. But "disappointingly," women are absent from 40 percent of the world’s largest publicly listed companies, and their representation (about 16 percent of Fortune 500 board seats according to GovernanceMetrics International) in U.S. company boardrooms has essentially stagnated over the past several years.
Konigsburg did acknowledge a lack of statistical evidence supporting the impact of women in boardrooms. (GMI reported in 2011 that women occupy 13-22 percent of the board seats for both its top 10- and bottom-10-rated companies). However, he and other conference participants suggested critical analysis of this issue is perhaps best based on "the common sense notion" that better decision making tends to result when a greater diversity of perspectives and life experiences are applied to a problem.
While quotas are providing women access to power in some developing and more socialist societies, the formula appears less likely applicable in the United States.
However, Yu said women are forging ahead as U.S. business leaders, apart from the corporate boardroom. “According to the Guardian Life Small Business Research Institute, future U.S. job growth will increase primarily from women-owned small businesses, and by 2018, women entrepreneurs will create up to 5.5 million new jobs.”
World Bank representatives Rita Ramalho and Mary Hallward-Driemeier; USAID Microenterprise Development Director Shari Berenbach; Dolly Oberoi, CEO of C² Technologies, Inc.; Smith MBA graduate Hayian Wang (’95), founder and managing partner of the China India Institute; Pete Freeman, a Peace Corps volunteer recently returned from Senegal; and Ximena de Sanchez de Lozada, former First Lady of Bolivia also spoke at the event.
"Each participant can take new insight and contribute in some way to furthering this recent emergence of women leading social and economic growth," said forum organizer Kislaya Prasad, research professor and director of the Smith Center for International Business Education and Research (CIBER). "The effectiveness of India's electoral quotas and the entrepreneurial savvy of women capitalizing on microfinance loans should be signaling to leaders in developed economies the potential for greater prosperity by having more women in leadership positions.”
The event, the annual Emerging Markets Forum, is presented by CIBER and the Center for Social Value Creation.