Essay Example on Women on Boards: Does Diversity Guarantee Better Performance?

The article by Creary et al. (2019) conducted an interview on 19 board directors (15 women and four men), to establish whether the cooperate boards benefited from diversity. Th researchers found out that diversity does not guarantee a better performing board and firm. Creary et al. (2019) are categorical on the impacts of 'checking the box' initiatives and tokenism. In these initiatives, the article clearly states such firms and board members fill the vacant positions with female candidates based on their genders and not focusing on their qualifications and the contributions they will be bringing into the firm. The article further shows evidence by giving an example of an interviewee who mentioned her plight when the interviewing board only recognized her gender in her selection of which she declined as they did not acknowledge her qualifications and the contributions she was expected to give as a board member. However, a section of interviewees suggested their boards had made progress on gender diversity but sidelined other aspects of diversity. Therefore, it can be established that this is a contradiction as it opposes the previous claims that the boards did not consider the aspect on gender parity.

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The authors put forth claims that some recruiting teams hire board members within the CEO and CFO circles which seems to be a more comfortable option (Creary et al. 2019). The authors indicate that in most cases, these members are made up of close allies and people who are known to the recruitment team. This is said to be as a result of either laziness in looking for qualified professionals or conscious bias. From the analysis, this is a blatant statement, and the aspect is not sufficiently researched as there is no further evidence to support these claims. In this regard, despite the facts in the statement, the piece of information needs to be further discussed and facts presented convincingly to substantiate the claims.

The article discusses the relationship between female board representatives and the performance of the given boards. It shows a positive impact on the accounting returns and shows no significant correlation with market performance. This is a contradiction as the market performance will eventually be impacted by a positive change in the accounting returns (Mnookin, Peppet, & Tulumello, 2000). The article, however, does not expound on this research, with minimal information on it. In this regard, more research work should be conducted and more information given about the relationship between female board representatives and the performance of the given boards.

Creary et al. (2019) state that diversity does not matter as much on the board's performance but depends on the culture of its leadership in listening to the stakeholders. This is contradicting when it is further claimed that, diversification is paramount in improving the performance of many firms that have not embraced diversity. The author is contradicting by stating how the leadership style in hierarchical boards is centered on the lead director. The two scenarios show how the lead director can either allow the voicing of the stakeholders and on the other hand, the board's leadership may choose to circumvent the opinions of the stakeholders. These contradicting opinions make it difficult for one to identify with the theories or know which one is dominant in the current market. This is unclear due to lack of sufficient evidence supporting these claims in the article.

The article states that diversity does not matter as much as the board members perspectives and various opinions are not valued or considered. The performance of boards running on hierarchical culture depends on the flexibility of the lead director's ability to allow other stakeholders to voice their views (Cameron, 2006). Boards where the stakeholder's concerns are not prioritized, the probability of achieving success is minimal. The article highlights the long-term board members that come from the old-fashioned approach of running boards, as the main hindrance to board diversification. Boards that value open communication are more likely to engage in conversations about diversity (Huse, 2007). In this regard, it is stated in the article that, there is a need to have a more egalitarian culture, where the voices of the stakeholders are heard, and their insights welcomed about diversification (Mnookin, Peppet, & Tulumello, 2000). The author is clear about this particular point, as it has been addressed from all avenues and sufficient research done on it. Both sides of the aspect have been sufficiently explained on both the performance of hierarchical culture and egalitarian culture.

Conclusion

Conclusively, it has been stated clearly in the article that the recruiting teams should expound on their methods of inculcating diversification and consider other diversification options available including social diversity and professional diversification among others. The author also puts more emphasis on the value of open communication among board members as they will be likely to engage in conversations about diversity and hence promote the spirit of diversifications in all areas of recruitment. It has also been noted from the article that, boards with intentions to maximize their effectiveness require doing more to ensure that the many perspectives of all members including the non-talkative ones are encouraged and voiced regularly and integrated into the boards work.

References

Cameron, K. S. (2006). Competing values leadership: Creating value in organizations. Cheltenham, U.K.; Northampton, Mass.: Edward Elgar.

Creary, S., McDonnell, M., Ghai, S., & Scruggs, J. (2019). When and why diversity improves your board's performance. Harvard Business Review. Retrieved from: https://hbr.org/2019/03/when-and-why-diversity-improves-your-boards-performance

Huse, M. (2007). Boards, Governance and Value Creation: The Human Side of Corporate Governance. Cambridge, Cambridge University Press.

Mnookin, R. H., Peppet, S. R., & Tulumello, A. S. (2000). Beyond winning: Negotiating to create value in deals and disputes. Cambridge, Mass: Belknap Press of Harvard University Press.