Women must still overcome cultural norms to become CEOs of large companies, write Bonnie Gwin, vice chairman and co-managing partner of Heidrick & Struggles’ CEO & board practice, and Victoria Reese, global managing partner of the legal, risk, compliance and government affairs practice.
The proportion of women appointed to public company boards of directors has risen markedly in recent years, but in the US and Europe, female chairs remain rare: at the end of 2018, there were only 30 female chairs among the Fortune 500 and the FTSE 100 combined, though the overall shares of board seats held by women were 22.5% and 29% respectively.
Turnover among board chairs at large companies is, of course, slower than that of board seats overall, but that alone doesn’t explain the low number. In our experience, in a non-crisis transition, many nominating committees are reluctant to appoint chairs who have not been CEOs or held similar roles.
Yet, given the increasingly powerful evidence that female leadership is correlated with high corporate performance – as well as the increase in pressure for diversity from the full range of stakeholders (including investors, regulators, and the public) – companies need to diversify at the chair level.
We interviewed a number of female board chairs from around the world to gain their insights on landing, and succeeding in, the role of chair.
Getting to the top spot
Overcoming cultural norms came up in our conversations with several chairs when talking about the path to the chair position. Becoming chair, these women say, requires a degree of self-assertion that, historically, women on boards may have been reluctant to exhibit.
This likely stems from the deep-seated (and at times conflicting) expectations of how women in positions of power should behave and how much their views should matter. “How, as a woman, do you voice a strong opinion or insist on a point without being thought shrill?” asks Cressida Hogg, chair of UK-based Landsec, a property-management company.
Taking the reins also requires the self-confidence to overcome any lingering “impostor syndrome” that keeps some women from fully appreciating their own qualifications. “You have to step through the self-doubt and take on any leadership role on the board you can,” argues Hogg. “Men typically have fewer qualms about their abilities, and any hesitation on the part of a female board leader may prove decisive in how she is perceived.”
Role models and sponsoring
Having role models can help. Hogg credits influences such as Sarah Hogg (no relation), who, in 2002, became the first woman to chair an FTSE 100 company board. Another chair found a source of inspiration in a female colleague on the board. In the past decade, research into the influence of sponsorship has highlighted the powerful effect of individual relationships in ensuring both that women and other minorities have access to opportunities for career advancement and that they have the best chance to succeed in those opportunities.
Of course, lengthy experience builds confidence. Jane Shaw, chairman of Intel Corporation from 2009 through 2012, served as an independent director for 16 years before assuming leadership of the board; during her board tenure she chaired the audit and compensation committees and served on the nominating and governance committees. And Maryellen Herringer, the former chair of ABM Industries, a US facility services provider, adds: “Chairing committees is critical because when the need for a new chairman arises, you become one of the candidates.”
Finally, the process of chair selection is crucial. To find a female chair and set her up for success, the process must be fair, wide-ranging, and rigorous. Even in cases where a woman is the obvious successor, or in a clear number-two role, several of our interviewees said that any female candidate should insist the board undertakes a process that includes consideration of other candidates. Not only will this ensure a fair process, but it will also strengthen the female candidate’s leadership position from the onset.
Phyllis Yale did just that before she became chairman of US-based Kindred Healthcare. “When my name came up during an open discussion of the board, I said, ‘I’m flattered, but the nominating committee needs to take this on, talk to each board member to determine what qualities are going to be required, and consider who would best meet those criteria.’”
She made the same request when first approached about becoming chairman of Blue Cross Blue Shield of Massachusetts. “In both cases, I knew I would have a lot more credibility if I had been subjected to a fair and thorough selection process,” she explains.
Thriving as chair
Chairing a board is not simply a matter of being first among equals: it is a qualitatively different experience, requiring distinctive leadership skills, often in the face of daunting challenges. Hogg, for example, is steering her board during Brexit. Kathleen Cooper began her tenure as chairman of the Williams Companies, a US energy company, after a takeover bid by a rival collapsed, six board members resigned, and a hedge fund shareholder attempted to replace the remaining directors.
And Yale, as chairman of Kindred Healthcare, helped guide the sale of the company to Humana and two private equity firms. She led not only the board but also the transaction committee, which oversaw an exceptionally complicated process with three buyers, more than a dozen advisers, and 100 people attending due-diligence meetings.
Critical leadership skills identified as success factors:
Listen first. “You should be the last to speak,” says Elaine Rosen, chair of US-based Assurant, a global provider of risk-management products and services. In the meantime, listen empathetically, solicit other points of view. She adds: “Be the most prepared, even though you don’t talk the most.”
Elizabeth Ashburn Duke, the current chair of Wells Fargo & Company, concurs: “As a chair, I find my best advice would be to be authentic as a leader, always come prepared, and be a phenomenal listener.” Further, says Hogg, you should not be afraid to reach out to other chairmen or other highly knowledgeable people for help and advice: “No one will turn you down, and most people are eager to help.” Elizabeth Tallett, chair of US health insurer Anthem, notes that “succeeding as a chair all boils down to clear communication and listening.”
Build relationships. “All the work of a chairman is relational,” says Cynthia Jamison, chair of Tractor Supply, a US farm-supply company. That includes building relationships with management – most critically, the CEO – and other board members. The relationship with the CEO must be comfortable enough, adds Yale, so that he or she will confide in you but also be willing to engage in robust debate and tolerate honest disagreement. Hogg says: “If the CEO never rings you or reaches out when something important comes up, you likely have a relationship that is lacking.”
A chairman must also cultivate closer working relationships with the other board members than she may have had as just another director, including maintaining contact in the months between meetings. Sheila Penrose, the chair of global commercial real estate services firm Jones Lang LaSalle, adds, “An effective boardroom is all about candour… the ability to discuss openly as a group fosters transparency and builds trust.”
Duke also highlights the importance of a healthy culture, noting that “it is important to foster the culture of a board: staying laser focused on your agenda, communicating individually and collectively, and taking the time to thoughtfully onboard new directors”.
Reach decisions consultatively. While the chairs we talked to agree that a new chair must establish her leadership style at the start of her tenure, they largely concur that unilateral decision making is likely to be unwelcome in a room full of people who are highly accomplished and accustomed to exerting great influence in their domains.
Intel’s Shaw is clear that “no matter how smart you are, being dictatorial is not going to get the kind of results a collegial board— which is most likely to be a successful board—is going to embrace.” Maryellen Herringer adds: “My job as chair was to wait until everyone’s voice had been heard and then not just build consensus, but find consensus.”
Advice for boards
For boards selecting a chair, it’s crucial, in our experience, to remember that culture and process are essential to success. Will a new chair have to overcome cultural norms on the board, as many of our interviewees did? Does the board value and select for diverse backgrounds and experience in its members and its chair? Answers to questions like these can significantly affect the chair’s, and the board’s, performance.
In that context, we recommend the following guiding principles for boards selecting a new chair:
- Think broadly. Ask what skills are really needed for the organisation today, and think hard about whether a chair needs to have experience as a CEO to be effective or whether that bias might be narrowing the talent pool too much.
- Run a high-quality process. Make sure the selection process is fit for purpose and thoughtful and follows best practices, rather than simply following the same process the board used the last time.
- Make diversity a priority, today and for the future. Ensure you have a diverse slate of candidates for the chair position, and future-proof your pipeline by recruiting board members for their leadership qualities, resulting in a broader pool of candidates when the day comes to select a new chair.
For all chairs of public-company boards, the commitment of time is significant, the work is challenging, and public scrutiny is intense. All public companies, and private ones as well, will benefit from having the best chair possible. Asking the right questions to increase the diversity of the pool they choose from, ensuring the eventual choice has the skills to lead as chair, and using a process that sets that person up for success will help companies thrive through our era of ever-increasing disruption.
And for chairs themselves, those who build their skills, seek counsel and sponsorship, and gain relevant experience will be putting themselves in the best position to succeed when they are called to lead.
Key recommendations for women on boards aspiring to be chairs:
- Assess yourself. Listen carefully to your annual board reviews as well as any other feedback on your performance as a board member, and determine your strengths and what board skills you need to develop further, such as listening or consensus building.
- Come to play. Ensure that you are engaged, prepared, and diligent, and set the standard for board commitment.
- Raise your hand. Volunteer for and take on board-committee leadership roles.
- Signal interest in moving up. Express interest in the board chair role and advocate for a thoughtful selection process.
- Seek counsel. Ask other chairs for advice about how they got there and how they achieved success.