Having women on a company’s board of directors is particularly important for a company’s long-term success. Directors are the elected representatives of the stockholders. Although we often hear about individuals in the C-suite, it’s the directors who set management policy and make strategic decisions. This influential role is dominated by men. Currently, women fill less than twenty-one percent of all board seats at Fortune 1000 companies.
Dads of daughters who have taken a risk to support more women directors have discovered that it isn’t a risk at all. Promoting women onto board seats benefits companies in a variety of ways. Boards of directors with women are better at problem-solving and decision-making. As a result, companies with the most women board members significantly outperform other companies on a range of financial measures, including return on equity, return on sales, and return on invested capital. A study by Credit Suisse Research Institute of nearly 2,400 large companies found that those with at least one woman board member outperformed those with all-male boards by twenty-six percent over a six-year period. Female board representation also helps companies be more responsive to customers. Women directors understand that women control about twenty trillion dollars of consumer spending worldwide, and they’re often more focused on innovative ways to sell products and services to women.
According to executive coach Susan Bloch, having more women on a board of directors also makes a company more attractive to investors. Gender-diverse boards produce lower corporate debt and tend to avoid risky corporate decisions. Fortune 500 companies with the highest percentage of women on their boards are more likely to appear on Ethisphere Institute’s list of the World’s Most Ethical Companies. Having more women board members also translates into higher corporate social responsibility ratings, which boosts a company’s reputation. But despite all of this evidence, many male board members still don’t prioritize adding women to their team. “In the twenty-five years I’ve worked as an international business coach,” says Susan, “I’ve witnessed business leaders suffer from the same blind spot—not enough women on their boards.”
In addition to improving their companies’ performance, men who advocate for more women on their boards of directors can also pay benefits forward to other women. A forty-three country study found that companies with a higher proportion of women board members also have more women in senior management positions and a smaller gender pay gap. The more women a company has on its board, the more likely the company is to hire women corporate officers in the future.
Even armed with this compelling data, building pipelines for women into leadership positions is challenging. Motivated by their daughters to take action, several dads have been experimenting with gender diversity initiatives in various industries, and their stories are a good place to start.
Women’s Rise at Coca-Cola
Muhtar Kent arrived in the US from Turkey in 1978 with no job and a thousand dollars to his name. What he lacked in possessions, he made up with ambition. He had an uncle in New York City who kindly shared his home until Muhtar figured out how to build his own American dream. At the time, Muhtar’s main objectives were paying rent, making his dad proud, and becoming a successful businessman. It took a few decades to add “become an outspoken feminist” to his list of life goals. But once he had a daughter, that became Muhtar’s top priority.
Growing up the son of Necdet Kent, Muhtar had big shoes to fill. Necdet was born in Istanbul, and he became one of Turkey’s most respected diplomats. During World War II, he risked his life to save dozens of Turkish Jews from the Nazis while he was stationed in France. Although he was awarded Turkey’s Supreme Service Medal for his bravery, he never thought of himself as a hero. He believed in tolerance and hard work, and he was fiercely committed to his family.
Muhtar was born after the war in 1952, while Necdet was serving as the Turkish Consulate General in New York. Muhtar spent his youth abroad, attending high school in Turkey and studying economics and business administration in London. After returning to Turkey for required military service, Muhtar finally headed back to New York to start a business career.
It took only a few weeks working at a big city bank before Muhtar became bored and restless. He started scanning newspapers for something more exciting, and he came across an ad for jobs at the Coca-Cola Company. Muhtar sent in his resume and was disappointed when he was only offered a position driving trucks. That still beat pushing papers in a bank cubicle, so he jumped at the opportunity. Muhtar spent the next nine months hauling Coca-Cola products around the country in a bright red truck. He’d wake up at 4:00 a.m. to arrive at supermarkets before they opened so he could stock shelves and build displays. It wasn’t glamorous work, but Muhtar loved being on the front lines of a national retail market. He soaked in knowledge about distribution and marketing strategies, and he was an incredibly quick study.
Muhtar’s work ethic was rewarded with a rapid string of promotions. By the early 1990s, he was overseeing operations in twenty-three countries as a Senior VP of Coca-Cola International. In 1999, he left Coca-Cola to become an executive at one of Europe’s largest international beverage companies. He was so successful that Coca-Cola recruited him back as the President and COO of its North Asia, Eurasia, and Middle East Group. In 2008, Muhtar reached the pinnacle of the international business world when he was named Coca-Cola’s CEO and Chair of Coca-Cola’s board of directors.
During most of Muhtar’s meteoric rise, he wasn’t focused on women’s equality or the role of women in business. But around the time that he took the leadership helm at Coca-Cola, his daughter, Selin, was graduating from college and forging her own way in the business world. When Muhtar saw the challenges that Selin faced as a woman trying to launch a business career, he began thinking differently about his leadership role. “I would like to see my daughter flourish professionally in a world that is more just and equitable for women,” he said.
Motivated by his daughter, Muhtar took a hard look around his company. He noticed that his workforce didn’t mirror the world—or even his own customers. Women are responsible for seven out of every ten purchases of Coca-Cola products, but there were very few women in top positions at his firm. Women held only thirteen percent of all senior leadership roles, and only two of Coca-Cola’s fifteen board members were women. Women were also in short supply in the jobs that fed into leadership positions. Only twenty-eight percent of the jobs that were one tier below leadership were filled by women, and the company had no plan to fix the problem. Muhtar was frankly a little embarrassed. He decided to roll up his sleeves.
Inspired to create a company where he would feel comfortable hiring his own daughter, Muhtar launched a Global Women’s Initiative to develop female talent and promote gender equality. To get started, he established a Women’s Leadership Council and tasked it with setting metrics for increasing the number of women leaders at Coca-Cola. The Council had four goals: recruitment, development, advancement, and retention of women.
Muhtar knew that he had to hold his leadership team accountable for results. He credits his daughter for giving him the sense of urgency he needed to make progress. He didn’t want his company’s program to just pay “lip service” to feminism. So he identified women’s leadership as its own priority instead of burying it in a general diversity campaign. He also set explicit goals for moving women into leadership positions. Most importantly, he told his managers that their performance reviews and future pay would be tied to whether they met the goals. “When we did that,” says Muhtar, “everything started to change.”
In less than four years, Muhtar increased women in Coca-Cola’s management ranks from twenty-two to forty percent. Since Muhtar began his initiative, women have held leadership positions in Coca-Cola’s finance, science and regulatory, quality control, and human resources departments. The company’s Controller, Head of Mergers and Acquisitions, and Internal Audit executive positions have all been held by women, who have also lead operations in Europe and Turkey.
Muhtar also figured out the importance of having women board members. Despite doubling the number of women on his board in his first four years, Muhtar decided he wasn’t going to be