Ambassadors of merit (reloaded)

In July 2012 Valore D, the Italian association of businesses to support the talent of women, launched “In the Boardroom”, a programme to select and train the best Non-Executive Directors.

In the Boardroom was designed by Valore D, with the support of GE Capital, at the initiative of Linklaters and Egon Zehnder, our Firm. Together with Linklaters, we selected and provided all key faculty members.

In The Boardroom was meant to select and promote “Ambassadors of Merit“, ready to change Italy’s corporate governance for the better, as a result of the huge opportunity represented by a super modern law (that came into effect in 2012) fostering gender diversity in the boardroom (read here for the beneficial effects of this law).

 

Italy is today a positive example of an improving corporate governance in Europe and beyond. Women as a crucial factor of positive change have given such a strong contribution to this that we are well beyond the turning point.

On 20 and 21 November 2015, we celebrated the conclusion of In the Boardroom, which was launched in July 2012. Ever since, it has helped well over 500 talented women prepare for the role of Non Executive Director.

Of those, a significant number are now Non-Executive Directors.

I feel humbled by the exceptional contribution of so many talented women. They have set the example for everyone in terms of dedication, willingness to prepare for roles where now merit and competencies have replaced “word of mouth” as a key to rigorous selection. Women mean merit, competence and better corporate governance. In summary, more women in leadership means huge change for the better.

The next step is now to continue to work to foster the benefits of gender diversity, and diversity at large, also when it comes to executive positions. “In The Boardroom” has been an exceptional factor and its effects will be felt for many years to come.

Tommaso Arenare

www.twitter.com/tommaso_arenare

The “Who” element, the “Female Opportunity” and a matter of pride

Claudio Fernández-Aráoz published “Great People Decisions” in 2007. The book has achieved global fame with fifteen international editions, emphasizing how important people decisions are for the success of one’s personal life as well as for the broader impact of leadership in the world we live in.

Claudio Fernandez-Araoz

I have been a proud Egon Zehnder colleague of Claudio since 2004. I am now ever more proud as I hold in my hands “It’s Not the How or the What but the Who“, Claudio’s most recent book that was released at the beginning of June 2014 during the celebrations for Egon Zehnder’s 50th anniversary.

It's not the How or the What but the Who

More will follow on the extraordinary leadership insights that Claudio’s forty-four short essays can provide the reader. If only for a short minute, in this post I want to focus on Essay 34, where Claudio describes what he calls “the Female Opportunity”:

Over the past few years, as I’ve traveled the world to speak with senior private and public leaders about talent issues,… I am often asked where I see the most opportunity. My answer is never a country, it’s a gender: women.

Claudio Fernández-Aráoz, “It’s not the How or the What but the Who”, Harvard Business Review Press, p. 160

 

A couple of pages later, Claudio, whom we at Egon Zehnder had the privilege of seeing in action speaking at our Milan office to an audience of 80 women leaders in 2012, ends this chapter on the Female Opportunity quoting one best practice: Italy.

Italy as best practice for the "Female Opportunity"

Italy as best practice for the “Female Opportunity”

And he does so with specific mention to the recent history of Italy’s most effective legislation in favor of diverse boards, arguing in the very same direction (indeed quoting this very Open Thinking) as we have for a long time.

Women mean talent, positive change, better corporate governance and endless possibilities.

 

Tommaso Arenare

www.twitter.com/tommaso_arenare

A couple of things we learn from a law on #diverseboards

I was recently asked what lessons we learn from the implementation of Italy’s law 120/2011 fostering gender Diversity on corporate Boards (so-called “Golfo Mosca” law).

In summary, this law provided an unexpected positive nudge to the country’s very perception on gender diversity, as well as to its corporate governance.

IMG_2778

Let me comment on both aspects.

Improving the stance on Gender Diversity through reducing unconscious biases

Humanity is thought to have taken its modern form some 200,000 years ago. Back then, when we used to live in the Savannah, in small closely-knit family groups, most of our key decisions were about our “fight or flight” dilemma, when we would face dangerous animals or other dangerous human beings and we had to decide, in as little time as possible, if the best way to save our lives was to “fight” for survival or else “flight away”.

A “snap judgment“, as the word implies, is our unconscious habit to make a decision about people, or reacting to people, in a matter of very few seconds after we meet with that someone or we face the situation we consider as a challenge. A snap judgment is a very precious and important habit, which we have developed over millennia of evolution.

Separately, “similarity bias” happens when we select people that are more similar to us, as opposed to people who appear more different. Evolution has fostered this trait, as a key manner to survive ever since the difficult times when we would live in the Savannah, trying to escape from animals and all sorts of dangers.

The combination of snap judgments and similarity biases is the one reason why gender diversity (but also age diversity, geographic diversity and possibly many other aspects of diversity) is so difficult to happen without a little nudge (such as that of a proper law). The “Golfo-Mosca” law forced shareholders to select new members of the board from the “under-represented gender”, overcoming unconscious fears, to the advantage of merit, competencies and corporate governance.

Without the proper nudge of a similar law, countries that are rightly considered as a cradle for merit and competency-based choices, such as the UK or the US, have not been able to move the presence of women boards swiftly to anywhere above the 15 to 17% mark (end of 2013) as opposed to about 20% in Italy over the same period.

Improving Corporate Governance

Another great result of Italy’s “Golfo-Mosca” law was that overall corporate governance improved. Some leading Italian companies have rightly taken the law as a great opportunity to reduce the number of board members, so as to make better use of their boards. FIAT Chrysler for example, reduced the number of its board members from 16 to 9 in 2012, thereby making it more effective as well as smaller.

We have also seen the development of several training programs for candidates to the position of non-executive director (with Valore D’s “In the Boardroom” being particularly dear to me, as you will read in a separate section).
This actually sets a new benchmark not only for women but for men as well. If shareholders have to select new board members, all things remaining equal, they would inevitably prefer to select candidates that have gone through specific training.

The real next step is to bring gender diversity down from boards to executive levels. We need to foster mentoring as a way to ensure that when it comes to promoting talent, women are in a similar position as men. Similarity bias, as we have described above, impacts very much on the promotion of executives. We want to intervene to reduce the impact of similarity bias in favour of promotions based on talent and merit.

Tommaso Arenare

www.twitter.com/tommaso_arenare

FT Innovative Lawyers 2013: Claudia Parzani

The FT Innovative Lawyers is a great award. I am so honoured that our “In the Boardroom” program was part of the reason for Claudia Parzani’s being acknowledged by the FT. In addition, I love to think that how women are changing Italy is only a beginning of how they will keep transforming the world for the better.

Live from Planet Paola

Claudia ParzaniOne of the ten winners in this year’s FT Innovative Lawyers survey, among over 600 participants, is Claudia Parzani of Linklaters, chair of corporate association Valore D and co-creator of In the Boardroom, an initiative she developed with GE Capital and Egon Zehnder to provide training and skills to prepare women for boardroom positions. Claudia also created the Breakfast@Linklaters network, featured in this year’s Client Service category.

Kudos to Claudia! I am proud to be participating in her boardroom program and honored to be in her circle.

Update & Correction (Oct. 17, 2013): post corrected to clarify that In The Boardroom was developed through collaboration among Linklaters, GE Capital and Egon Zehnder. The supporting member companies of Valore D can be found on this page.

View original post

Three dimensions for more effective leadership of #diverseboards: rethinking the role of the Chair

Even if with a margin for improvement, yet Boards are diversifying rapidly – in terms of gender, nationality, culture and outloook. The Egon Zehnder 2012 European Board Diversity Analysis signalled that the number of women Non Executive Directors had increased four times across Europe over the prior eight years. There are large countries (Italy is an example) where the number is growing even further. We believe this trend will also affect the US and gradually other countries globally.

In addition, we have observed that a significant increase in gender diversity typically translate into further diversity: diversity of backgrounds, diversity of geographies (with an increase in international board members), diversity of age (generally, younger board members sitting at the table will also increase the variety of perspectives).

As Boards become more diverse, differences create a huge opportunity for those very Chairs to leverage on them, learning additional competencies to draw in diverse Board members, build on their insights and ensure livelier debate and board leaderhip. In addition, new Non Executive Directors, joining Boards with ever broader diversity, carefully scrutinise how Chairs leverage their additional, diverse capabilities and competencies.

This change is rapidly making an impact on all key competencies of a good  Chair, even more so than on all other Board members.  Running the risk of oversimplifying, a Chair will need to adapt along the following dimensions:

  • Inclusive leadership & team effectiveness: in the new, more diverse environment, in addition to key interpersonal skills (such as collaboration & influencing skills, but also their Board Leadership, as well as their Coaching & Developing skills), a Chair will need to work towards greater inclusive leadership and team effectiveness. Leaders with a diverse team will face viewpoints that have not been expressed before. New generation Chairs will need to facilitate an inclusive environment in order to appreciate and combine the knowledge and experience of individuals with different backgrounds and viewpoints;
  • Listening & trust building in a more diverse environment: this is an additional and crucial component of a Chair’s ability to succeed when leading a diverse Board. Listening means the ability to suspend one’s agenda and judgement, making room for other people’s thoughts, ever more so in a more diverse environment. In the life of a diverse Board, listening implies being able to remain silent for long, in order to gather sufficient elements for making up one’s own opinion. Also, listening means being capable of asking proper, effective, most of the time open-ended questions, both during the Board sessions and, even more importantly, between them. A diverse set of perspectives requires the Chair to be more skilled at facilitating discussions and soliciting input from members of the team that come from less assertive cultures or personalities. Chairpersons will find that they will have to seek the opinion of more introverted colleagues and they will need to facilitate and navigate the more complex discussions into a conclusion that all members respect, if not agree with. In some instances, this will imply the seeking out of a point of view, its recognition, and then the ability to keep engaged even those colleagues whose point of view might not have prevailed. Discussions among diverse groups will require higher energy to lead them successfully, avoiding excessive confrontation;
  • Dealing with unconscious biases: the Chair will need to influence the Board’s decision making process with the ability to establish effective communication channels with all board members, no exception. In order to do this,  broader diversity of the Board will also require that the Chairs learn how to identify and deal with two crucial unconscious biases which can hamper effective, independent decision making at Board level. They will to tweak some consequences of two unconscious biases through a little nudge. Similarity bias happens when we select people that are more similar to us, as opposed to people who appear more different. Evolution has fostered this trait, as a key manner to survive ever since the difficult times when we would live in the savannah, trying to escape from animals and all sorts of dangers. A “similarity bias” results when individuals are more likely to imitate cultural models that are perceived as being similar to the individual, based on specific traits (such, for instance, age, gender, geographical location and so on…). Similarity bias is even enhanced by our other bias, which we call snap judgement, whereby we unconsciously make up our mind on someone during the first milliseconds after we meet. The combination of snap judgements and similarity biases is the one reason why gender diversity (but also age diversity, geographic diversity and possibly many other aspects of diversity) is so difficult to happen without a little nudge. Effective Chairs will learn to nudge themselves towards overcoming both unconscious biases.

All the above requires growing levels of self-awareness from Board members and Chairpersons. The journey towards the benefits of greater diversity and inclusion at Board level has started. I am convinced that it will continue to be a satisfying and rewarding experience.

Tommaso Arenare

A time for women


A great day of work in Venice, on 23 November 2012, to discuss how we can all help women flourish and, with them, make Italy and the world a better place. A great “Thank you” to all outstanding participants, who ensured this was a success!

This is the video, in Italian, of of the opening panel, which I had the privilege to lead:

Full video coverage can be found here.

We believe “Tempo di donne” can be one of the many initiatives in support of the outstanding women who are leading Italy and Europe towards better Corporate Governance.

Tommaso Arenare

Wrong brain, wrong education and that little nudge to help

As a fact, in the US listed companies, about 15 board members out of 100 are women.

As another fact, the US has historically rewarded merit and competencies more than many other countries.

How can then happen that in selecting people, one of life’s most crucial choices, we are so biased as to unconsciously neglect merit and competencies?

Breaking the impasse is possible, if we try to tweak some consequences of two unconscious biases through a little nudge.

Similarity bias happens when we select people that are more similar to us, as opposed to people who appear more different. Evolution has fostered this trait, as a key manner to survive ever since the difficult times when we would live in the savannah, trying to escape from animals and all sorts of dangers.

We have the wrong brain and the wrong education. When making people decisions, we fall pray into a series of unconscious psychological biases, such as surrounding ourselves with similar people with whom we feel naturally comfortable. Many of these biases were very effective for our primitive ancestors, but they are no longer useful for building great teams which require complementary and highly sophisticated skills.

Claudio Fernández-Aráoz, Author of Great PeopleDecisions, 2007

A “similarity bias” results when individuals are more likely to imitate cultural models that are perceived as being similar to the individual, based on specific traits (such, for instance, age, gender, geographical location and so on…).

Similarity bias is even enhanced by our other bias, which we call snap judgement, whereby we unconsciously make up our mind on someone during the first milliseconds after we meet. I have separately written about the many benefits of overcoming snap judgements.

The combination of snap judgements and similarity biases is the one reason why gender diversity (but also age diversity, geographic diversity and possibly many other aspects of diversity) is so difficult to happen without a little nudge (such as that of a proper law).

That little nudge lets us overcome unconscious fears, to the advantage of merit, competencies and corporate governance.

Tommaso Arenare