We are at the precipice of a dramatic shift in the way that society and business see women in leadership. On one hand, we see a string of regulations being passed, dictating how many women need to sit at the boardroom table, yet on the other, a significant backlash to diversity, equity, and inclusion efforts around the world.
In the last two years alone, the collapse of a Silicon Valley bank, the dismantling of a plane mid-air, and the inability to fight the LA wildfires have all been blamed on the prioritization of DE&I. In my role as Director of the Women in Boards Program at IMD, I see this tension daily. I see engaged leaders, excited about having more women in the boardroom, but within the same client organizations from which these leaders join us, I see cuts to DE&I initiatives and mass redundancies of the specialists who once led them.
It’s a paradox plaguing the conversation about women on boards, but that does not mean the conversation is not happening, nor does it mean that the future is not bright.
Earlier this year, I chaired an incredibly powerful conversation at Davos about the future of women on boards. I was joined by an esteemed group of female leaders, including Constanze Schweinsteiger, partner and member of the supervisory board at Roland Berger, Sigrid Artho, Managing Director of Spencer Stuart in Switzerland, Katie Jackson, Chief Executive at Rio Tinto and Chair of POWERful Women, and Sheila Lirio Marcelo, Founder of Care.com and CEO of Ohai.ai.
Here are some of the key predictions we shared for the future of women on boards and the things to do to keep the conversation going within your organization.
While women are most likely to inherit wealth, they are least likely to be involved in the financial planning conversation or on the boards of the businesses where their parents or spouses generated significant wealth.
In this next generation, against the backdrop of the greatest wealth transfer in history, $30tn – the size of US GDP – will be going to women. The opportunities for female leaders are immense and will change the entire conversation around women on boards.
That said, while women are most likely to inherit wealth, they are least likely to be involved in the financial planning conversation or on the boards of the businesses where their parents or spouses generated significant wealth.
For organizations, now is the time to focus on horizontal succession planning and ensuring your wealth lands in the hands of educated and empowered women. For female leaders, now is the time to follow the money and back growth companies on paths to change the world. While in public markets, seats rarely become available, leading many qualified women to fight over the same position, the wealth transfer paves the way for a new strategy. Join the boards of growth companies that are being started by female entrepreneurs and backed by female investors. Follow the money, and beyond that, follow your pocketbook and invest in female startups wherever possible.
“Even if leaders change their language to appease the masses, their mission statements must not falter.”
In the meantime, we can redirect the backlash. As the adage goes, all publicity is good publicity, and organizations must stay on course. Even if leaders change their language to appease the masses, their mission statements must not falter.
We must also be careful not to catastrophize the situation. All transformations come with resistance of some kind, and we must take this to mean change is happening. There are more women on boards than ever before, and a growing appetite amongst talent to work for sustainable and diverse organizations. 80% of people recently surveyed in the US (where diversity initiatives are under the most scrutiny) said they would not work for a company that does not prioritize diversity and inclusion. We need to rely on our advocates to shift the conversation in our favor and continue to put pressure on our organizations to make it happen.
A tip in redirecting this conversation is to tailor your language to a male audience through data and objectivity. The data speaks for itself: boards that have female members have 19% better outcomes. 40% of the FTSE 250 in the UK now have female board members, a third of all board positions are filled by women in Europe, and in the US, women occupy 27% of board seats in large and mid-cap companies. The drumbeat is the data, and the business case for inclusion is often much stronger than the case based solely on financial returns.
Women make up 50% of talent pools, customers, and the stakeholder landscape, so for companies looking to hire, attract, and work with the most innovative female talent, they need to first create a female-inclusive board.
We also need more women to pay it back and help bring other women up the ranks with them.
Male colleagues and leaders have a pivotal part to play too. The majority of decision makers today are male, which means we have to create champions and allies within our majority workforce. We need to respect their position and bring them into the conversation. Arguably, we should have done this a lot sooner.
We also need more women to pay it back and help bring other women up the ranks with them. If we want to prove that there should be more women in leadership, we have to make room for them to join us at the table.
While the statistics of women in board positions are rising, what seems to be stagnant is the number of women in key decision-making roles such as chair, executive director, or senior independent director. According to the MSCI Women on Boards and Beyond 2024 Report, women occupy 27.3% of board seats at large and mid-cap companies in the US; however, men still largely occupy top executive roles, with female representation declining among these positions.
We need to ensure women are hired across a range of board roles and, vitally, create a pipeline of female talent behind them. Attracting and retaining women is critical, and the biggest driver in the conversation is culture. This is not just important to women, but to all leaders who benefit from an inclusive workplace that fosters engagement and creativity and allows leaders to grow, experiment, and learn from their mistakes.
In Europe, 20% of executive seats are held by women, but just 8% of CEOs are female. As they say, if you want to be a chair, you had better first be a CEO. Men are promoted faster and made to prove their worth less. Women are more likely to need to show possibilities here and now, and are expected to be overall superstars. We need to get comfortable with the idea that, like male leaders, female leaders do not have to be phenomenal in every area of business, every day. They possess different levels and layers of leadership style.
Organizations need to think about their talent pipeline and do so thoughtfully in a long-term and continuous way. Succession starts on the first day of a leader’s employment. Identify your high-potential talent, go deep down, and distribute wildcards to the greatest talent in your organization, allowing women to jump over the hierarchy where appropriate.
There is a war for female talent; give them the chance to perform in your organization, be creative, and retain them wherever possible. And for women, be authentically yourself, be bold, and find your strengths. Leadership means not always being liked, and while a bitter pill to swallow, it is imperative that female leaders say no, and that this does not land any differently than when said by their male counterparts. My goal is to help women recognize and voice their role in the boardroom, and my next step is to bring male allies to the table.
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