Results from a recent gender diversity study I conducted for the lodging industry indicate that of the 238 board seats available among the 28 U.S. lodging companies, only 51 were occupied by women (21%), a woefully low number. If we live in a world where women account for 80% of consumer spending and a multitude of credible studies point to a correlation between greater gender diversity and strong board performance, it is certainly time for us to address this issue head on. I have personally facilitated countless client board meetings and can say with unwavering confidence that gender diversity within the boardroom leads to first-rate ideation and collaboration. Here are some of my thoughts to stimulate change within the lodging industry.
Stay in front of the mandates — In 2018, California required 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. Other powerful influencers such as hedge funds and proxy advisory firms are following suit with similar expectations. Currently, the hospitality industry is massively unprepared and needs to pivot to get in front of this impending problem.
Challenge the status quo – According to a recent PWC study, in 2018, 32 new female, independent directors under the age of 50 were elected to S&P 500 board; the days of having to be a current/past Chief Executive Officer and in your 60s are over. Forward thinking companies within the lodging space have already started to recognize that there is great value in seeking out a younger board director community. Reward is not only in the area of gender parity; these individuals will have a very different skill set than more tenured board members in the areas of technology, thought and sustainability; and, in almost all cases, will have a closer connection to the consumer.
Hold the Gatekeepers Accountable – I read an article where the recently retired CEO of Unilever, Paul Polman, so accurately stated, “I would have a hard time even understanding how you can be successful as a business if you cannot mirror the society that you serve in the “first place” and that driving diversity really has to be done with conviction by the CEO of that company.” Maybe it is time to hold the gatekeepers accountable. I have never seen a nominating/governance committee compensation program tied to the success and/or failure of gender diversity initiatives – maybe it is time.
The ideas above do not only apply to public companies; I encourage private companies throughout the lodging community to take this initiative seriously. Whether you are a management company, private owner/operator or private equity group a greater female base at the board level is a critical formula for success.