Diversity in boards
Why do we fuss over board diversity, especially when it comes to women’s representation? Because we believe a diverse board makes for a more profitable company. And what is a company doing business for anyway? Is not profit the first thing on anyone’s agenda at these board meetings? Today, it is not just profit but sustainability. And there is wisdom in getting women and subject matter experts into boards for a better fighting chance to survive.
Women usually drop out of the corporate race when it is time to bear and rear children which is when they are about 30-40 years old. After seeing the kids through pre-school, and they decide to go back to the corporate world, they usually think this phase ends in retirement at about 50-60 years of age. These days, however, with good exercise and a healthy diet, we are seeing many women over 60 still active, even if mandatory retirement age hovers between 60-65 years. I even see 70- and 80-year-olds still active in consultancy, legal work, and even as doctors!
The retirement age is actually a topic we also wish to address, with a repeal of the retirement law so companies need not retire executives just when they are in their prime of “wisdom-sharing” and what they call having “wisdom judgment.” At a certain age, people just know what to say and how to make decisions, “just because.”
I met a lady while we both were waiting at a doctor’s office recently and she said she had retired at 63 from a corporate job. I convinced her to take up a course at the Institute of Corporate Directors (www.icd.ph) and not to waste her corporate experience. She agreed with me and will soon consider being a corporate director. This is why the NextGen Organization of Women Corporate Directors (NOWCD) ladies (www.nowcdphils.com) all want to get the word out to women about to retire to stay the course and to use their experience to get into boards and continue being useful.
We envision to make corporate women aspire to get into the B-suite or be independent directors, even if they start in private companies or non-profits before joining publicly listed companies (PLCs). We need a pipeline of younger women, fresh retirees, and anyone who has had corporate experience to serve on boards. Private companies must also be encouraged to also try having Independent Directors as a good practice, for good governance, even if you are a closed corporation. It is healthy for management to hear the opinions of disinterested parties, or directors who are not part of the family, as most private companies start and end as family corporations. The patriarch or matriarch is usually not challenged by younger directors, and this causes “group think” which is unhealthy for any company.
More than ever, corporations face challenges with the post-pandemic developments, the entry of Artificial Intelligence (AI) and Fintech, and only a diverse and progressive board can handle the survival, growth, and sustainability in this Digital Age.
The Management Association of the Philippines or MAP (www.map.ph) just recently held an MSME (micro, small and medium enterprises) Business Clinic in cooperation with the Philippine Trade Training Center of the Department of Trade and Industry. Though we did not talk about women directors, the challenges for MSMEs in this digital age was shared by no less than Donald Lim, a seasoned marketer who shared his views about AI and the new marketing strategies used in this tail end of the Industrial Revolution. He mentioned five generations now exist in a company — from Baby Boomers to Gen Alpha — so there is a need to use the wisdom of the seasoned older generations while using the agility of the younger generations. Given this situation, corporate directors must also learn about the new strategies management can apply in struggling companies. But how can you add value to your board if you are not exposed to developments in technology?
Even supply chain has new strategies as discussed by MAP member and head of PASIA (Procurement and Supply Institute of Asia) Charlie Villaseñor. Charlie now prescribes the pooling of resources for procurement, whether you are the buyer or the seller. You need to augment your resources by outsourcing and collaborating with similar companies and selling as a group. That is survival in this age of accessibility via technology (a.k.a. Lazada and Shopee).
As an Independent Director who sits on the Board of a PLC, I continue to learn from clinics and conferences like this one that MAP organized. One has to continue learning from peers and from younger people who are more adept at adapting to technological change as they were born in the Digital Age. They are digital natives while we are digital immigrants. So, women and SMEs (Subject Matter Experts) are who we need to make better boards which can be agile while having the wisdom of age.
Chit U. Juan is co-vice chair of the Environment Committee of the Management Association of the Philippines (MAP). She is also the president of the Philippine Coffee Board, Inc. and Slow Food Manila (www.slowfood.com).
