Participating in countless client board meetings, I can say with confidence that gender diversity within the boardroom leads to first-rate ideation and collaboration. In addition, credible studies conducted by the likes of Boston Consulting Group and McKinsey & Company prove out a strong correlation between a board comprised of a larger female presence and superior results in the boardroom.
While top governance experts have been promoting greater gender diversity for more than a decade, not much has changed within the restaurant industry. These glum statistics say it all.
- In 2015, of the 392 board seats available among the 45 U.S. public restaurant chains, only 69 were occupied by women (18%).
- In 2019, of the 414 board seats available among the 51 U.S. public restaurant chains, only 80 were occupied by women (19%).
A 1% increase – seriously? In its simplest form, 80% of all consumer spending is driven by women. Logic dictates a board with more female representation encourages deliberative thinking in critical areas such as strategy culture, governance, risk, diversity and shareholder engagement, especially in the restaurant business.
When a concept is broken, influencers step in; powerful groups such as hedge funds and mutual funds and governmental bodies are pushing for non-negotiable change.
- In 2018, California mandated that companies incorporated in the state and listed on a major U.S. stock exchange have at least one female director by the end of 2019 and at least three female directors by the end of 2021.
- Starting in 2020, Institutional Shareholder Services (ISS – the leading proxy advisory firm) will vote “no” on re-election of a Nominating and Governance Chairman if their company does not have at least one woman on their board.
This is not a new concept. In 2008, Norway set quotas of 40% female representation, and other western European countries have set 30% targets for female board representation. A vast majority of our global clients agree that executing on this mandate was not easy, but it has paid off incredibly well.
Although these accountability measures will apply predominantly to public restaurant companies, I implore the thousands of private restaurant organizations to take this initiative very seriously. While the current restaurant C-Suite and succession planning pipeline is male-dominated, I have personally worked with many extraordinary female executives throughout the industry who can deliver incredible value within the boardroom. Private companies’ “keepers of the castle,” such as nominating/governance committees, private equity owners, founders, family offices and executive recruiters, need to hold each other accountable and change their thinking around boardroom diversity initiatives.