Diverse boards make profitable companies

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Diverse boards make profitable companies

I recently heard a woman executive declare: “Just because they are women does not mean they are good for...

pacita u juanI recently heard a woman executive declare: “Just because they are women does not mean they are good for the company!” Aray! (Ouch!) Has this woman not heard of diversity? Or is she just unenlightened about diversity?

Diversity, not equality as many activists want to put it, is what business people want in their boards as the new mantra for profitability. Credit Suisse studies have proven that companies with diverse boards are more profitable. Is it a coincidence or a scientific fact?

You can Google Credit Suisse: https://www.credit-suisse.com/ph/en/news-and-expertise/news/economy.article.html/article/pwp/news-and-expertise/2015/06/en/diveristy-on-board.html

Or even just note this excerpt:

Diversity on Board!

Barbara Lejczak,

Editor, Credit Suisse

The report “The CS Gender 3000: Women in Senior Management” demonstrates that companies with more women in the boardroom bring better returns and outperform on the stock market. However, Europe still needs to appoint another 400 women to director positions to meet diversity quotas and targets.

Here in the Philippines, we have just started the Philippine chapter of Women Corporate Directors (www.womencorporatedirectors.com), who meet in global conferences or institutes, such as on happening in Japan—The Asia Institute on September 10 and 11, 2015, at the ANA Hotel.  There is also a New York annual meeting and a European Institute in the first quarter of each year.

But still, in corporate boards of nonprofits, we also need diversity as nonprofits need to be sustainable financially, if not overly profitable. Take the Sharephil, or Shareholders Association of the Philippines (www.sharephil.org) led by Evelyn Singson. The men do not mind having Evelyn as chairman. The Management Association of the Philippines (MAP, www.map.ph) now has two women on board out of nine governor seats. Maybe this is also a reason MAP remains as one of the most sustainable nonprofits.

So, profit-making companies must take note of this study and realization that it is not just adding women, but it is changing a default “all male” or “all female” board to a diverse one.

I know of EON Inc. (www.eon.ph), a board I used to sit in as director for four years, which now has four women and three men on the board . And you can ask its CEO Junie del Mundo how successful EON has become as a stakeholders relations company.

I sit in our own family board where there are three women and four men, two of the men being independent directors. Now, that is diversity. Not equality as I have previously pointed out.

So, if you are looking for a way to make your company profitable, look at your corporate board. In our ECHOsi Foundation, a nonprofit, we have two men and three women. Again, a diverse board. In the Philippine Coffee Board Inc. (www.philcoffeeboard.com), another nonprofit, we have three women and six men on board. Diversity rules and these boards have been sustainable models for many years now.

In all-women organizations and all-men organizations, they find that diversity can be attained by having male (in the case of an all-women board) advisors and, conversely, female advisors for an all-male board. Usually though, these one-gender organizations live on donations and grants and are more difficult to sustain. This is why they have fundraisers ad infinitum.

And what may be the reason your company may be struggling to eke out a profit? Take a second look at your corporate board. Maybe you will find the key to sustainability and profitability. Make it a diverse board.

Simple and doable. Get in touch with www.icd.org to find independent female or male directors for your company or organization.

Pacita “Chit” Juan is a current governor of the Management Association of the Philippines (www.map.ph) and is a vice president of Business and Professional Women (BPW-Makati). She is also the president of Women’s Business Council of the Philippines (www.womenbiz.ph) and the Philippines Coffee Board Inc. (www.philcoffeeboard.com) You can find her on LinkedIn: Pacita Juan; Facebook: Pacita “Chit” Juan; and Twitter: @chitjuan. E-mail her at [email protected]

This article reflects the author’s opinion and is not the official stand of the BPW-Makati.

Women Stepping Up is a rotating column of members of BPW-Makati and comes out twice a month. For more information on BPW-Makati, visit www.womensteppingup.org.

 

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