In a shining flash of the obvious, a new study confirms what many of us already instinctively know: women and minorities continue to be under-represented on company boards due to a lack of mentors.
Researchers Michael L. McDonald of the University of Texas in San Antonio and James D. Westphal of the University of Michigan found from their descriptive sampling of large U.S. corporations, 28 percent of women and 22 percent of racial minorities contribute to the pool of candidates serving on one board. Of the pool of candidates serving on multiple boards, that number drops to 8 and 5 percent respectively.
The study entitled Access Denied: Low Mentoring of Women and Minority First-Time Directors and Its Negative Effects on Appointments to Additional Boards published in the Academy of Management Journal explained that the figures serve to highlight an important difference. Those who hold multiple board seats “tend to be seen by other corporate leaders as members of the corporate elite, or inner circle of corporate leadership, in part because holders of multiple directorships tend to exercise disproportionate influence over corporate policy at each of the firms where they serve as a director.”
The researchers studied a sample of women and racial minorities in 2,000 of the biggest corporations in the US and found that the disparity was caused largely by the failure of 90 percent of white male corporate directors to mentor the under-represented groups on board participation basics. The new study revealed that first-time directors of racial minority groups are “72% less likely [than white males] to be advised by an incumbent director to get the CEO’s okay before raising concerns or questions about strategy or policy issues in formal meetings, and they are 69% less likely to be advised that directors are expected to provide advice and information to the CEO rather than exercise control over policy and strategy.” The numbers are 54 percent and 49 percent, respectively, for women first time directors.
The effect is detrimental, the researchers say, because when first-time directors are not guided properly on the subtleties of the board participation, they end up making many negative first impressions. As a result, they reduce their chances of getting invited to participate in a second board by as much as 57 percent.
The lack of diversity is also disadvantageous to companies in the long run. The study found that minority first-time directors tended to have stronger qualifications, longer management experience and higher levels of knowledge and information. As a result, McDonald and Westphal conclude that the mentoring gap “may ultimately tend to compromise the quality of director contributions to strategic decision-making, because it disadvantages women and minorities who could otherwise provide relatively high-quality advice and counsel to executives on strategic issues from getting board appointments.”