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Women on boards: Why it matters
October 03, 2023
Board diversity has been an intense focus area for investors for years. This trend is clear among directors as well. With emerging regulations,and growing external expectations, companies recognize having a wider range of representation at decision-making tables can be essential for success in today's landscape. For women looking to positively impact their careers and community, serving on a board can be a proactive way to make a difference. What are some of the steps women can take to become board-ready?
In this episode, Maria Moats, Retired Partner, Former Governance Insights Center Leader at PwC, is joined by Barb Loughran, a Board Director and retired PwC Partner, for a discussion on women's representation on boards and what it means to be board-ready.
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About the podcast participants
Maria Moats, Retired Partner, Former Governance Insights Center Leader at PwC
As a Retired Partner and the Former Governance Insights Center Leader, Maria Moats was relentlessly focused on helping directors address corporate governance issues by providing insights and tools to help them be more informed and effective in their roles and create better outcomes.
Before leading the Governance Insights Center, Maria served as PwC’s Chief Diversity Officer and Vice Chair, Mexico and US Assurance Leader - overseeing PwC’s national Assurance practice, including strategy and operational aspects to manage a practice of approximately 20,000 professionals. Maria is currently the Senior Relationship Partner (SRP) for several large multinational clients in the financial services, transportation, consumer and industrial products industries.
She is a first-generation Mexican-American and an advocate for diversity, equity and inclusion.
Barb Loughran, Board Director and retired PwC Partner
Barb Lougran is a current board member, global executive, financial expert and prior advisor to boards and audit committees, with 35+ years of experience working with Fortune 500 C-Suite executives and Boards as they navigate strategic, transformational and operational challenges. She has strong and diversified industry expertise, spanning consumer products, retail, engineering, industrial products, services, energy, pharmaceuticals, medical device and technology. Barb is a highly qualified financial expert with 20 years as a PricewaterhouseCoopers partner, including two tours in the National Office. Barb was responsible for leading PwC’s Industrial Products business unit in NY Metro with P&L responsibility. Additionally, she has deep M&A expertise, including leading due diligence internationally. Barb is a current board member, retired PwC partner and angel investor.
Episode transcript
Find episode transcript below.
00:00:02:00 Welcome to PwC Pulse, a podcast to provide insights to help you solve today's business challenges.
MARIA MOATS:
00:00:09:20 Hi, I'm Maria Moats Governance Insights Center Leader at PwC and I'm excited to be your host. Today, we welcome a longtime colleague and someone I highly respect. Barb Loughran, a retired PwC Partner. Barb currently serves on the board of directors for two companies, a Fortune 500 global public company and a Fortune 1000 public company. And she's also an angel investor in women led startups.
00:00:38:00 Trust, transparency and diversity, equity and inclusion are all important leadership topics that we've discussed in our other episodes. So today we'll dive into a topic that can positively influence all of these areas, and that is women's representation on boards and what it means to be board ready. With emerging regulations and growing external expectations companies recognize that having a wider range of representation at decision-making tables can be essential for success in today's landscape.
00:01:15:09 At PwC, we believe that fostering a culture of belonging that represents everyone we serve is critical to success, and we know that that starts at the top. So today I'm excited to learn from Barb's vast knowledge as a seasoned board member. Barb, welcome to the podcast.
BARB LOUGHRAN:
00:01:35:02 Thanks, Maria. Great to be here.
MARIA MOATS:
00:01:36:26 So I thought we would start with a few questions to get to know you. Sometimes we refer to them as icebreakers, and I'll start with the first one. Rapid-fire, what's your favorite city in the world to visit?
BARB LOUGHRAN:
00:01:50:28 I would have to say Nuremberg, which is a small walled city, cobblestone streets in Germany. It's a little north of Munich. It's where we lived for two years and where my oldest son was born.
MARIA MOATS:
00:02:03:27 Oh, that's fantastic. As you were describing it, I was almost putting myself there. So thank you for that description. What's your favorite wellness habit?
BARB LOUGHRAN:
00:02:12:10 I'm gonna use a simple one. It's to move. It doesn't matter what you do, how long you do it, where you do it. Just keep moving.
MARIA MOATS:
00:02:22:16 I love it. And who is your inspiration?
BARB LOUGHRAN:
00:02:26:20 I would have to say my parents. And I'll focus on my mother. She's 91 and still very active. And what inspires me the most about her is probably that she is willing to learn new things every day.
MARIA MOATS:
00:02:44:17 When you think about what you learned from her and learning new things every day and as you raise your own family, what did you do every day to remind yourself of the teachings?
BARB LOUGHRAN:
00:02:55:23 My mom would always try things that not everyone would do. So, for instance, when she turned 50, she said she wanted a motorcycle and she rode until she was 75. So it's more the go for the challenge and don't worry about the fear.
MARIA MOATS:
00:03:10:21 All right. So courage. Sure. So let's start with the first question for you as an experienced and seasoned board member. You've been a woman in leadership for 30 years. You've worked with many Fortune 500 C-suite executives and boards, frankly, throughout your career. I've known you for a long time. So when did you first join a board? And importantly, why did you decide to become a corporate board director?
BARB LOUGHRAN:
00:03:36:28 Yeah. Thanks, Maria. I've had a passion for corporate governance for a long time.
00:03:41:28 I think the first time I stepped into a boardroom, probably about 30 years ago, the energy in the room and the discussion really excited me. I had a lot of energy coming out of that. I knew that I wanted to spend some time in a boardroom and that just built over my career as I spent more time reporting to boards from the other side of the table.
00:04:04:03 So I ended up retiring from my first career of 33 years early at 55, knowing that what I wanted to do was to go on corporate boards. So I pursued that passion and was fortunate enough to go on two boards, as you mentioned, and that was about four years ago.
MARIA MOATS:
00:04:22:02 So a second career.
BARB LOUGHRAN:
00:04:24:05 A second career, but not full time.
MARIA MOATS:
00:04:27:25 That’s fantastic. So we know from data Spencer Stuart does a lot of work in this area and they've said that female representation among the S&P 500 board directors as a whole is now at 32% as of 2022, and that is increased 86% in the past decade. Our own research also shows that 45% of board committees will look to recruit women board members over the next three years.
00:04:53:13 So while we celebrate progress for sure in the last decade, we know there's still a lot of room for growth. You've witnessed firsthand the challenges and triumphs of gender parity for women. So here's the question.
00:05:05:28 In your opinion, why is it important for companies to include women in leadership as part of their diversity, equity and inclusion initiatives?
BARB LOUGHRAN:
00:05:13:28 Yeah, so Maria, I completely agree with you that there's been some progress, but I would argue it's not enough. So there's more that needs to be done. And we're talking today about gender. But I think the diversity conversation, particularly at the board level, is broader than that.
00:05:32:28 And it does start at the top. And so when you think about the executive leadership team of an organization that needs to reflect that diversity that you're looking for in your organization.
00:05:44:25 But I would also argue at the board level, that is the top of the organization. That is where the tone, in my view, needs to be set. So it's important to have that diversity reflect through from the board to the executive leadership team and then throughout the organization. So I think it's a broader conversation around diversity.
MARIA MOATS:
00:06:06:16 Completely agree with you. We issue a survey every year. We call it the Annual Corporate Directors Survey. Last year, 88% of the directors, because we survey directors, told us that diversity of thought is very important. Goes to what you're saying. But here's the question. Can you tell us why it's important to have all this diversity in the boardroom?
BARB LOUGHRAN:
00:06:26:01 Yeah, absolutely. So as I think about diversity in the boardroom, it's really diversity of thought and how you get that right. So that spring and the diversity of the backgrounds, the experiences, the gender, the age, etc., I think we can agree that if a board has groups saying and is all on the same page, all have the same experiences, that that's not going to give the best insights to management and really it's the value to the shareholders.
00:06:55:23 And I would even broaden that to stakeholders. So I think it's easy to see, in my opinion, why diversity of thought is important in the boardroom. Maybe I can give an example of what I've seen some more robust and broader conversation.
00:07:16:28 So one area perhaps is CEO succession. So historically, I think a lot of discussion around CEO succession has been what's the skills, what's the background of the individual, what have their experiences been?
00:07:28:16 And of course, that's very important. But I think adding in what's their leadership style? What's their view on building a strong culture? What's their view around diversity and inclusion? So I think with more diversity in the boardroom, I think those conversations have been more robust.
MARIA MOATS:
00:07:47:28 Take us inside the boardroom. You've been on boards now for years. When you asked two questions that maybe changed the outcome. In other words, everybody was driving left and your question made people think, let's go right?
BARB LOUGHRAN:
00:08:03:13 So that may happen more often than with me. So to me, it's not left and then right to me, it's deepening the conversation around an issue. So it's asking a question that either has already been thought of by management right? And then it's a conversation that says, Yep, we thought about that here. Let's talk about that. But that then allows the full board and their experiences to reflect on that and bring more insights and different ways of thinking.
00:08:37:10 It's sometimes changing direction, but to me it makes for a more fulsome discussion that may result in a different strategy. But often it's enhancing the strategy or recognizing some risks that perhaps management hadn't focused on previously.
MARIA MOATS:
00:08:55:17 And just for our listeners, I want us to place ourselves in the room with you. These are fellow peers that our C-suite executives have had huge careers, have dealt a lot with strategy and risk. And in order to have a conversation where it could be persuasive, right, or go deeper, like you said, it's not an easy thing to do.
00:09:16:15 You've done that. And sometimes we don't know what happens in a boardroom because it's not an open forum. So that's why it's important for us as listeners to kind of put ourselves in the room, particularly as I'm about to ask you some more questions and go deeper. So can you share with our listeners what you think are the benefits, benefits to you of being on a board?
BARB LOUGHRAN:
00:09:41:07 So let me start with for the listeners to think about why they would want to join a board. Let's talk about what it's not, because I think that's important. So if you're thinking of going on a board for money or prestige, I would think of another plan. If you're thinking that you're going to be able to get in and get more involved in the business and execute on things.
00:10:06:04 Again, that is not the role of the board. That is the role of management. If you think that you're going to sit in a boardroom and direct management on what they will go execute or what they will go do again, that's not the role of the board. The board's really there to provide the insight, the value, the critical thinking to really help management and enhance the strategy that they have come up with.
00:10:32:28 So maybe let me get a little personal of why I wanted to join a board. I talked a little bit about it before. I thought that I could add some value based on my 33 years of experience in dealing with Fortune 500 global public companies. So I thought I could add some value to two companies and shareholder value.
00:10:53:05 It's also a great opportunity to learn. So you're in the room, as you mentioned, with some outstanding individuals who've had very diverse experiences, and so they come at things from different perspectives and you learn a lot and from the management team. And obviously there's a lot of issues out in the world today. So you are keeping current on those.
00:11:15:20 And as I mentioned before, it's just for me, I get a lot of energy from the boardroom. So yeah, it's fun.
MARIA MOATS:
00:11:23:24 It's fun. It sounds like it's very rewarding. Now, let me ask you, how do you know if you're ready to serve on a board?
BARB LOUGHRAN:
00:11:31:09 So the way I would think about it is think about the value that you would add to a board. It's really thinking about the experiences that you've had and where you think you can add value to a management team. I would also suggest that folks think about the types of boards that they might want to go on. So there are many types of boards, different sized companies.
00:11:56:29 So public, private, you've got pre-IPO, you've got private equity boards, you've got not for profit boards. So think about try to match your value with the type of board that you would be interested in. And then when you're thinking about your experiences and what you can bring to the board, it's really about broad and deep experiences. So for instance, there's a lot of talk about let's put a cyber expert on a board.
00:12:27:07 Well, there are ten on average seats on a board that is not very many, right? And so to use that seat for one, I'll call it a narrow expertise, important expertise, but is really challenging. So as you think about what I'd like to do is run through a list of areas that boards are looking for in terms of experiences.
00:12:52:09 But the important thing that I want folks to take away from it is it's not one of these you want to have multiple because that's where you can bring more value to the board and to shareholders. So areas that boards are looking for are M&A. And in this environment, dispositions and transformations. P&L responsibility and I'll highlight this one if you haven't, if our listeners haven't had P&L responsibility, I would highly recommend that you try to seek that out.
00:13:24:02 It doesn't have to be a big organization. It can be a small group. But P&L responsibility I think is quite important. International experience, again, you don't have to live and work internationally, but if you have oversight over a global team, that can be very helpful. Certainly, a financial expert is always important to a board. Certainly CEOs, we know that, but also division presidents.
00:13:49:06 So think about those roles. Human capital, I would say from a strategic standpoint. So if you're involved in human capital, get involved in the strategy part of it. ESG, cyber technology and digital, certainly in this environment, innovation. So the list goes on. And then the other piece is corporate governance experience. So if you can get yourself in the boardroom, is that's presenting or if you're already a C-suite executive in the boardroom. But that experience is going to be important.
MARIA MOATS:
00:14:22:07 Right. Meaning what the boards do. Why do they do it? How do they do it is important?
BARB LOUGHRAN:
00:14:25:14 To understand that. Yep.
MARIA MOATS:
00:14:26:10 Many women are ready for board positions, but there may not always be a clear path to gaining a board seat. Do you think there's a specific juncture in someone's career when it's prime time to work towards a board position? Are there key components of research or resume building that you see as critical to the process?
BARB LOUGHRAN:
00:14:47:01 So historically, at least from my vantage point on boards, it's primarily been retired CEOs and CFOs. You'll often see today a current CEO take on one other board role. Those folks with their vast experience, I think, are very important on the board. I do think in today's rapid change and emerging issues, I mean, we think about supply chain, cyber, the rapid change in technology, geopolitical, human capital.
00:15:21:03 I mean, there's so many issues that current executives are dealing with that I really do believe that there should be more current executives on boards. Now. It's challenging, right? Because you have to think about the time commitment and there is a time commitment and those are fixed dates. So it is a balancing act if you're a current executive.
00:15:43:12 But to get back to your question, Maria, which is, is there a time in your career? I really think it depends. So it depends on if you go back to the question around the experiences that you've had, it's really when you've had enough experiences, enough deep experiences where you can bring the value to the type of board that you're interested in and you have the time and the passion to devote to that board.
MARIA MOATS:
00:16:13:10 To do it well. Okay, so now just a few more. I would say a bit more tactical questions for women that are board ready. Everything you just said, they're ready. What are two or three specific actions that they can take now to advance the board search?
BARB LOUGHRAN:
00:16:29:09 So the first thing I would do that I did as I was searching for a board is you tell everyone that you interact with that you're looking to go on a board. You never know where the board opportunity is going to come. So that's the first thing. I would also reach out to your current network, the current folks.
00:16:47:23 And it doesn't have to be people that you've stayed in close contact with. I reached back out to CEOs and CFOs and board members from 10, 15, 20 years ago in my career, and they were more than willing to get together for. I had a lot of breakfast lunches and dinners and coffees and drinks to connect with folks and really just get their insights around the board process and to make connections.
00:17:15:15 The other thing I would do is you have your current network, but I would really encourage folks to expand that network. And what do I mean by that? That can be going to different meetings and things around boards that you meet other people. But it's also the folks in your network of asking them to introduce you to one, two, three other people.
00:17:38:04 And I always found people are more than willing to do that. And the worst case is you'll meet a lot of interesting people.
MARIA MOATS:
00:17:45:19 So you found on your journey that people are generous, that they're willing to help.
BARB LOUGHRAN:
00:17:49:19 Absolutely. Absolutely.
MARIA MOATS:
00:17:51:26 That's wonderful.
BARB LOUGHRAN:
00:17:52:22 There are organizations out there focused on getting women on boards. I'll name a few, but I'm not recommending any particular ones, but just so that people know they exist. So women in the boardroom, which is headquartered in New York, Athena Alliance, which is headquartered on the West Coast, there's Women Corporate Directors. There's also the NACD National Association of Corporate Directors more broadly.
00:18:16:16 But these organizations will also help you with your board documents, which is different from a resume. So that is another important step in the search process. And then the last thing I'll comment on is search firms, an important part of the process. My recommendation in this area is I find the best way to get connected with them is to have someone in your network or now your expanded network to connect to their relationship at the search firm.
00:18:46:27 I find that that's the better way to a warm introduction.
MARIA MOATS:
00:18:49:27 Get connected.
BARB LOUGHRAN:
00:18:46:27 Yes. Yeah.
MARIA MOATS:
00:18:51:18 So, Barb, you've worked with and served on boards for many years. As we wrap up today, is there any other advice you'd like to share with women looking to join a corporate board?
BARB LOUGHRAN:
00:19:02:11 Maria, I have two thoughts. One is don't get discouraged. So this process of getting on a board is a black box process. You may go for a month, two months, not hearing anything. But that does not mean that you're not being considered for a board. It just means you might not have been the last one or two candidates that they're looking at.
00:19:25:05 So patience and fortitude are the important things when you're looking to get on a board. My other request is that once you're on a board or even through the process for the first time to connect other women and executives of diversity so that they also can get on a board.
MARIA MOATS:
00:19:46:19 I love that. I love that. Pay it forward. Barb, thank you for sharing your invaluable guidance with us and empowering fellow woman on their board journey. It's an exciting time for women in leadership as businesses continue the push for greater representation within their boards.
BARB LOUGHRAN:
00:20:03:05 It's been a pleasure. Thank you.
MARIA MOATS:
00:20:05:01 And to our listeners, thank you for joining us on this episode of PwC Pulse. We'd love to hear your thoughts about today's conversation. You can leave a review on your favorite podcast platform.
ANNOUNCER:
00:20:17:12 Thank you for joining us on the PwC Pulse podcast. Subscribe to PwC Pulse wherever you listen to your podcast or visit PwC.com/pulsepodcast to hear our next episodes.
ANNOUNCER:
00:20:31:05 Copyright 2023 PwC. All rights reserved. PwC refers to the PwC Network and or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
00:20:50:00 This podcast is for general information purposes only and should not be used as a substitute for consultation with professional advisors.
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