Soon after moving to Nashville in 2010, Jan Babiak teamed up with ConsensusPoint CEO Linda Rebrovick to form a Nashville chapter of Women Corporate Directors, a global organization that aims to grow the ranks of women in corporate boardrooms and advocates for best practices in corporate governance. Babiak, who last month was named to the board of Walgreen Co., is a former Ernst & Young managing partner who retired from the firm in 2009. We talked to her about how to get more women a seat at the boardroom table.
What should aspiring women directors do to prepare themselves?
The first thing to do is get permission from their employers. Some companies, including the Big Four accounting firms, don’t allow their people to serve on boards because of the possible conflicts of interest. The second thing is to build a suitable board bio, which is quite different from a traditional resume. Resumes often focus on experience in the most recent role. A board bio needs to succinctly demonstrate a breadth of experienced gained over a much longer time frame.
If you really want to do this, you need to think about what boards are seeking. You almost always need full P&L experience at some point in your career, not just functional expertise, and more broadly, you have to have had enough business and life experience. How many M&A deals have you been through? How many business cycles have you seen where you had to manage both ups and downs? I once had to ramp up an already large team by 300 percent in a year, and it can be just as hard to manage steep growth as it is a downturn.
So it’s important to look well ahead even as you’re building your career in the shorter term?
Long-term planning is important. I started thinking in my late 30s about wanting to be on a board by the time I was 50. People often don’t make a strategic personal plan — or even a tactical one. Then, when they get to their 50s, they wonder why other people are getting on boards. It often comes down to having what I call “a decade plan.”
Is the bar higher for women to get on boards?
That’s an interesting way to phrase that thought. It’s not higher but it’s in the wrong place. If you look at a typical board, it’s likely made up of 10 sitting CEOs, all white men. The question needs to be, “Is that the best way to do things?”
It’s often said that great minds think alike. But if that’s the case, aren’t all but one of those 10 redundant? We need diversity of thought. A board needs geographical reach to bring together different skill sets. That will open doors to women — and certain other men, too.
Are we making progress at a decent rate?
At the rate we’ve seen recently, it would take about 200 years to get to parity. The only real progress we’ve seen has been in some European countries that have introduced everything form general guidance to quotas. But even guidance has gotten people to look more closely.
I was going to ask about quotas. Are you in favor of them?
I think the idea of quotas is abhorrent, but I’m not sure there’s a better alternative. In the U.K., regulators adopted a ‘comply or explain’ rule regarding the separation of the CEO and board chairman roles. Companies that didn’t split the offices needed to explain themselves to investors.
That approach changed the market in just a few years. Companies moved in a very short time to very effectively complete that separation. So I don’t know if quotas are quite right, but there needs to be some accountability and public exposure.
Can the market provide that accountability over time? Or said differently, do investors care enough about this issue?
They should. A Catalyst Inc. study clearly showed that companies produce higher returns when three or more women are on their boards.
Sunlight is a great form of disinfectant. Something like ‘comply or explain’ combined with the threat of stronger measures when companies don’t make progress is the best solution. People need to become more educated about the proven business and shareholder benefits; then we can start to create change.