Graduate Management News

August 2015

The Newsletter of the Graduate Management Admission Council

GMAC Viewpoints: Why B-Schools Are a Key to Gender Parity in the Boardroom

Business schools can take a lead role toward gender parity in the boardroom by increasing the pipeline of women into their programs.

Women in Boardroom Homepage

I was struck recently by a July 20 opinion piece in the Washington Post (“In the Business World, Diversity Pays. Really.”), in which columnist Catherine Rampell referenced a paper by Isabelle Solal and Kaisa Snellman of the INSEAD Business School (“Women Don’t Mean Business? Gender Penalty in Board Appointments”) that stated: “When public corporations appoint women to their boards, their stock prices usually fall, likely because female board appointments are taken as a signal that the firm is motivated by social performance goals, to the detriment of pure profit maximization, irrespective of the actual or perceived competence of the female nominee.”

In her piece about the benefits of diversity in business, Rampell argued that “having a more eclectic workforce, and thus a greater range of perspectives, is actually a very promising way to make money. Prioritizing diversity is not just compatible with maximizing profits; it may be the key to doing so.” She cited some compelling examples of how diversity is helping companies do just that.

So why the gender penalty? And more importantly, what’s the solution?

One solution, according to Solal and Snellman, is greater exposure. Just as greater exposure to female leaders has been shown to reduce stereotype bias, an increase in female board appointments may likewise decrease the perception that firms select directors for any reason other than their qualifications.

Arguably, a solution of equal importance that business schools can take toward gender parity in the boardroom is to increase the pipeline of women into b-school programs.

                                                                                  

Boardroom Parity Starts with B-Schools

 

The effort to build a more diverse and, many would argue, better boardroom starts with recruiting. In testing year 2014, 105,476 women sat for the GMAT® exam, accounting for 43 percent of all test takers. At GMAC, we offer a three-step approach to recruiting women that includes a wide range of invaluable information and tools to help schools reach and recruit qualified women for their graduate management programs. These steps are designed to help you:

  1. Expand your reach to women interested in management degrees
  2. Empower potential candidates
  3. Highlight and promote your programs to attract female candidates

Elissa Sangster, executive director of GMAC partner organization Forte Foundation, agrees. “Business schools play a crucial role in expanding the pipeline into corporate leadership positions, both in developing future leaders and promoting current leaders,”1 she said.  Schools can do this by:

  • Identifying alumnae who may be a fit for the list of global board-ready women
  • Communicating early to female students about how to become board-ready
  • Adding board readiness to the business school curriculum
  • Continuing the conversation after graduation in alumni magazines and conferences

Women comprise about half of the total US workforce, and more than half of all managers are women. Women are responsible for almost 80 percent of all consumer spending, and there are more than 10 million majority-owned, privately held, women-owned firms in the US, employing more than 13 million people and generating more than $1.9 trillion in sales.2

Clearly, women are vital to today’s economy and workforce. And recruiting qualified women for your graduate management program is the best first step toward breaking down the stereotype bias that Solal and Snellman speak of in their report. Are you up to the challenge?


[1] Sangster, E. (2013, March). Women on Corporate Boards: The Role of Business Schools for Fundamental Change. Graduate Management News. Retrieved from GMAC website: http://www.gmac.com/why-gmac/gmac-news/gmnews/2013/march-2013/women-good-for-business.aspx.
[2] Ibid.


About the Author

Sabrina WhiteSabrina White is vice president, Americas at the Graduate Management Admission Council.