"It has long been assumed that women possess less business experience than men, and that's the number-one myth we debunked," says Dr. Siri Terjesen, assistant professor of management at the Neeley School of Business at Texas Christian University in Fort Worth. "Women have plenty of experience, although they often have different types of experience than men." She and two colleagues, Dr. Val Singh and Dr. Susan Vinnicombe, of Cranfield University in the United Kingdom, examined new appointees to the boards of the Financial Times Stock Exchange's 100 most highly capitalized blue-chip firms in the U.K. The research included all 72 women appointed to FTSE 100 boards during 2001-04 and 72 men randomly selected from the 470 appointed during that time frame.
They found that female directors were much more likely to have MBA degrees than their male peers and were twice as likely to have earned their degrees from elite institutions.
Male directors had much more experience on FTSE 100 boards. But female directors had somewhat more experience on FTSE 101-350 boards and international boards. Women directors also had more experience than men—-by 62.5 percent to 38.9 percent--on other types of boards.
The women had a higher likelihood of having a portfolio of career experiences than did the men by 41.7 percent to 27.8 percent. Women had held senior positions both in the private and public sectors, such as in major businesses, government, nonprofit organizations, and educational institutions. The men typically had been more singularly focused.
"Women are often asked to be on smaller boards and community boards, and are also more likely to take short-term or part-time contracts that help accumulate facets to their experience," Dr. Terjesen explains. "They say yes more often to different things. This provides a diverse set of career skills they can bring to their boards."
The study, "Newly Appointed Directors in the Boardroom: How Do Men and Women Differ?" will be published in an upcoming issue of the European Management Journal. It was posted in February on the journal's web site.
Previous studies had looked at the overall makeup of boards and the characteristics of directors in general, but did not specifically examine the qualities boards currently desire in director candidates. Nor did they scrutinize gender differences.
For all 144 directors studied, the researchers noted demographics, educational background, business reputation, international experience, and previous board experience. They examined career sectors the directors had worked in, such as international, financial, management consulting, public sector, and voluntary/charity.
The primary reason men still vastly outnumber women in corporate boardrooms, Terjesen believes, is the outdated assumption that women don't possess the high-level experience necessary to join those hallowed ranks.
In recent years, women have been slowly making headway in the boardroom, particularly as non-executive directors. According to the study, women in 2006 comprised 13.7 percent of FTSE 100 non-executive directors, up from 9.6 percent in 2001.
The incidence of female executive directors, however, increased only marginally to 3.8 percent in 2006 from 2.0 percent in 2001.
This means women are still not making it into the highest echelons of FTSE 100 directorship in positions such as CEO, CFO, or COO, regardless of the depth and breadth of their previous senior-level experience at smaller firms and other organizations.
The percentages should continue to improve, however, as increasing numbers of highly qualified women keep knocking on boardroom doors and more major corporations realize the value of inviting them inside.
Such diversity is becoming increasingly valued. Regulatory and competitive pressures are driving corporations to seek directors from outside their own often homogeneous talent pools. Some countries are even mandating gender quotas, says Dr. Terjesen.
"Corporate scandals such as Enron and WorldCom directed attention to the people on the boards," she says. "This led to new guidelines requiring more outsiders on boards. Firms with more directors from outside the company have higher levels of corporate governance."
"Earlier research shows that companies with more women on their boards tend to perform better," Dr. Terjesen says.
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