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The continuing barriers to boardroom diversity, the pros and cons of matched giving and the rise of EVs in China
Women say they want it. Companies say they’re pushing for it. Governments are threatening to legislate on it. So why isn’t greater board diversity happening? Only one in six board members in Fortune 500 companies are women. This fascinating paper, which is based on annual surveys of directors since 2010, shifts the attention from policies on diversity to the people concerned.
Be sure of one thing: female directors are a talented bunch. More than two-thirds hold lead roles, such as chief executive or president (only 51% of men held similar roles). That contradicts the popular belief that female board members have mostly non-operational or support-function experience. Are companies getting the most from this pool of skills and experience, though? No. Around one-fifth of female directors complain of not being listened to.
The paper’s examination of the recruitment process throws up some interesting insights, too. Male-dominated informal networks (read, the Old Boys’ Club) top the list, with 33% citing this as a barrier. Perceived lack of industry knowledge (28%) and straight bias (22%) (“Women do better on boards when they behave like men”) follow close behind.
On the plus side, women board members are statistically more ambitious (27% of women want to lead or continue leading a company, compared with 19% of men), as well as deriving more pleasure from power (91% of women say they enjoy it, compared with 70% of men). These last stats are heartening, although the report in general highlights a depressingly familiar story – diversity is a two-bout fight: first to gain access to the boardroom, then for parity within it.
B Groysberg and D Bell (June 2013), “Dysfunction in the Boardroom”, Harvard Business Review, 88-95
Models for matching
Matched giving has become a beloved feature of many companies’ charitable giving programmes. Encourage your employees to give £1 and the company will give £1 too. But could this approach actually be disincentivising employee giving? Quite possibly. If, for example, your company says it’s aiming to give £100 to a particular charity, people think, “great, we only have to raise £50 to meet the £100 target, so I’ll give less”.
So do we ditch matched giving? Not so fast. There are other, non-standard forms of matching that merit consideration. The “non-linear” match is one. In this approach, gifts of £10 to £20 may keep to the 1:1 formula, say, but those over £20 are matched 2:1. “Social matching” is another alternative. The idea here is to match funding according to the percentage in a team or other fixed employee group who make donations. If 10% give, the 1:1 standard formula still stands; increase that to 20%, meanwhile, and it jumps to 2:1.
A novel approach is the “lottery match”, whereby every £1 donated through payroll giving also serves as a “lottery ticket”. The monthly matched funding “pot” goes to the charity linked to the winning ticket, while the employee ticket holder is entitled to a reward such as a day off work. That way everyone – charity and donor – is a winner. Game on.
M Sanders, S Smith and M Norton M (May 2013), “Non-Standard Matches and Charitable Giving”, Harvard Business School working paper, 13-094.
China’s electric journey
In its latest five-year national plan, China’s authorities aim to put 500,000 electric vehicles (EVs) on the road by 2015 (increasing to 5m by 2020) To kick-start its nationwide EV effort, the government is enacting “wide-scale, system-level change”. In practice, that means incentives galore and some pretty smart strategising. But is it working?
Let’s start with the positive. China’s strategy has been to channel its roll-out efforts through city-based pilots. No two pilots are quite the same. So Shenzhen is pushing a leasing model through strategic partnerships, for example, while Chongqing is championing a battery-swap approach. Two key success factors stand out amid this variety: (i) a “hands off” approach by central government, where it sets general goals but steps away from actual implementation, and (ii) the blending of top-down and bottom-up processes, thereby “leveraging both central sponsorship and local initiative”.
The city pilot schemes have their downsides, however. In practice, each city ends up competing against every other city for limited resources from central government. This has led some city authorities to overstate the success of their particular programmes. Local protectionism is another problem, with local governments developing solutions for their locations and their local companies – not the nation as a whole. That reduces the ability to scale up the models nationwide.
This paper is important reading for any policymakers or companies involved in implementing cross-sector, collaborative projects to promote sustainability through system-level change.
M Marquis, H Zhang and L Zhou (Spring 2013), “China’s Quest to Adopt Electric Vehicles”, Stanford Innovation Review 11 (2): 52-57.
The International Council for Science and the International Social Science Council are inaugurating a ten-year research programme on global sustainability. The Future Earth programme has announced an 18-member science committee. It will be chaired from 2013 to 2016 by Stafford Smith, science director of the Australian national science agency’s Climate Adaptation flagship project.
The Aspen Institute has launched a cross-sector Food Security Strategy Group. The group held its inaugural meeting in Morocco in June.Academic news Business School Bulletin Oliver Balch