Innovation in the boardroom
With the law in their hands, women have marched into the boardrooms of Norwegian companies, particularly in the public limited companies (ASA), where women now hold four out of ten directorships (40 per cent).
So what does this do to the boards? Will more women and thereby greater diversity lead to more bright ideas and the necessary innovation?
Not necessarily, And not all by itself.
More women = more innovation?
Innovation means a deliberate introduction of new products, processes or methods in a role, group or organisation that clearly improves the results.
“Modern working life makes great demands on innovation to secure companies’ competitive advantage,” maintains sociologist and researcher Anne Grethe Solberg at the BI Norwegian School of Management
Solberg has completed a comprehensive study of 915 senior and middle leaders in the industries media, oil and information & communications technology (ICT) in order to find out what role gender plays in the companies’ innovation climate.
Four arguments for more women
Anne Grethe Solberg’s work identifies four main arguments for a better balance between men and women on boards and in management groups:
- The argument of rights
Some people think that women and men both have a right to be present when decisions are taken. Both sexes have a right and a duty to help make strategic decisions; this is only fair and just.
- The moral argument
Others say that moral and ethical responsibility means that women and men are equally represented where decisions are being taken. For them, it is important to avoid discrimination and systematic exclusion of one sex. That both women and men are involved in decision-making is socially useful and socially responsible (confer Corporate Social Responsibility).
- The attractiveness argument
A gender balance where decisions are being made makes the company or board more attractive. The company should emerge as a good place to work for highly-qualified men and women who are not yet appointed. Equality of opportunity is seen as a good profiling tool.
- The efficiency argument
This argument is directly linked to innovation and diversity. It is claimed that an even distribution of men and women means greater efficiency because they are different and because, together, they are more innovative. The interaction between men and women will lead to better decisions: for example new perspectives, new products, new customers or other ways or working.
The characteristics of a good innovation climate
If they are to succeed with innovation, the Board members must be allowed to express their individual differences and values. But at the same time they must succeed in discussing their way to consensus.
“To achieve this, it is crucial that the chairperson of the board creates a good climate for innovation,” maintains Ms. Solberg.
The BI researcher’s study shows that the optimal innovation climate is characterised by an emotional tone that is open, trusting, accepting, free of tensions and with respect for differences and disagreements.
“In a good innovation climate, everyone feels secure enough to take part in discussion, they know what the aims of the group are, they stick to the subject and support one another’s ideas,” says Ms. Solberg.
“It is not until all the members of the board, in the light of their own expertise, are ready to change the direction of the discussion that synergy effects can be achieved.”
The role of the chair
A board must function as a working party. The chair has a special responsibility to tie together and concretise the results of the discussion.
“A facilitating leadership style is best at achieving creative and innovative processes in working parties,” concludes Ms. Solberg.
According to Ms. Solberg, the facilitating chairperson has the courage to remain entirely neutral and objective and is careful not to express his or her own opinions until the rest of the group have had their say. He or she has the ability to polarise the exchange of opinions in the group.
This means that disagreement is seen as a springboard for taking better and innovative decisions. A facilitating leader entrusts the group as a whole with the full responsibility for taking decisions.
Androgynous leaders win
Ms. Solberg’s study found that leaders with both masculine and feminine traits, the androgynous leaders, were the best at facilitating and creating a good innovation climate. They were better than their masculine and feminine colleagues.
Ms. Solberg also demonstrates that the incidence of androgynous leaders is more or less equal among men and women. And this can be a comfort, and an opportunity, for both women and men.
The article is based on Anne Grethe Solberg’s lecture “Innovation leadership in the boardroom”, held on the National Board of Directors Day, on 16 October 2008 at the Norwegian School of Management.