On the 50th anniversary of the publication of Betty Friedan’s The Feminine Mystique I’ve started to wonder how far we’ve come in the boardroom. As I finished a conversation with a search firm that specializes in oil, gas and mining this week I questioned the level of progress.
The search firm noted that for the most part the companies it speaks with are simply not interested in having women on their boards. They don’t see the point of diversity. They say there aren’t enough women with direct experience in oil, gas and mining, and they don’t have an interest in looking outside the industry.
Some companies in these sectors are bowing to international pressure to add women, and several, such as energy industry giants Exxon Mobil, BP and Shell, have two women nonexecutives on boards with 12 to 15 people. Mining is the worst sector for gender diversity, with just 5 percent of board seats in the top 500 mining companies held by women, according to a recent report published by Women in Mining and PriceWaterhouse Coopers.
Diversity of thought, experience, knowledge, understanding, perspective and age means that a board is more capable of seeing and understanding risks and coming up with robust solutions to address them. It’s not about sticking a bunch of women on the board for the sake of optics. It is about extending the fundamental principles of good governance to the oil, gas and mining sectors. Healthy businesses need comprehensive diversity.
It is not as if the status quo were working so well. The industry is rife with governance issues, and putting the same people on the board over and over again is not going to fix that. According to the report by Women in Mining and PriceWaterhouse Coopers, profit margins are higher for mining companies with women on the board. Of the top 500 mining companies surveyed, the 18 mining companies with 25 percent or more of their board consisting of women had an average net profit margin for the 2011 financial year that was 49 percent higher than the average net profit margin for all top 500 mining companies. Their research also showed that those mining companies with female board members have a higher average profit margin overall (23 percent) than the average net profit margin for the top 100 mining companies (20 percent).