I received this from a senior in-house attorney (male) at an international Fortune 500 company in response to my posts on gender bias:
international arbitration . . . tends to be dominated by white males with European surnames. The closed pool presents something of a problem for parties who are not enamored of a scrub-each-others’-back (consciously or unconsciously) form of decision-making. One way of injecting energy into the process is to apply diversity to the appointment of neutrals, arbitrators or mediators. It forces us to actively look for the right skills, talent, [and], reputation for the particular dispute. [W]ithin [my company], where we seek to measure whether we are hiring diverse outside counsel, my own division has been able to claim some diversity credit by appointing women arbitrators. (and, between you and me, I have to say that we’ve never been disappointed – the dancing backwards rule always applies.
I am not advocating here for “special treatment” for women neutrals. I am advocating for the end (or simply the diminishment) of “special treatment” for male neutrals. Here, the client speaks. Hiring with diversity in mind forces clients to find the best and most talented person for the job free of the “quid pro quo” burdens of the old boys’ network. “Sorry, Chuck. That was a great getaway to your country club and I enjoyed the golf, but we’ve got these stupid diversity goals to meet so I’m afraid I’m not going to be able to reciprocate your many kindnesses by throwing as many cases your way as I used to.” /1
Diversity Makes Good Business Sense
If diversity makes good business sense to the Fortune 500, shouldn’t it make good client relations to the AmLaw 200? Consider the following item from CNN (I’ll track down the link again soon).
On Oct. 1, Indra Nooyi takes the helm at PepsiCo (Charts). And with that, the soda and snacks giant becomes the largest U.S. company by market cap to put a woman in charge. . . Since 2001, CEO Steve Reinemund has enforced aggressive hiring and promoting rules. Half of all new hires at Pepsi have to be either women or ethnic minorities. (Half!) And managers now earn their bonuses in part by how well they recruit and retain them. Today 25% of Pepsi’s managers are women, up from 22% four years ago. Six of its top 12 execs are now women or minorities.
Is Pepsi simply being a good corporate citizen? Is it putting social concerns above profits? Hardly.
The diversity push is part of Pepsi’s game plan to better understand the disparate tastes of new consumers as it continues to expand globally. That’s probably the new CEO’s biggest challenge. But Nooyi–who as Pepsi’s CFO led its successful acquisition of Quaker Oats–should be up to the job. The thing that got her hired, after all, wasn’t being a woman. It was being a sharp strategist. /2
Women Improve Performance
A study by Roy Adler, a professor at Pepperdine University in Malibu, California, tracked 215 Fortune 500 companies, comparing their financial performance to industry medians. He found that “companies that smash the glass ceiling also enjoy higher profits.” In a recent Harvard Business Review article presenting his findings, Adler showed that “the companies with the highest percentages of female executives delivered earnings far in excess of the median for other large firms in their industries.” The Canadian Conference Board findings support those of Adler. It tracked the financial well being of firms with two or more women on their boards in 1995 to see where they stood six years later. It found that firms with women board members were much more likely than companies with all-male boards to be leaders when ranked by revenue or profit. . .
What might be the cause of the dramatic differences that women on boards make to corporate bottom lines? Consider the following:
In May of 2002, The Conference Board of Canada published findings of a major study they did of women and corporate boards. These findings suggest a strong link between female numbers on boards and good-governance credentials. The researchers found that 94% of boards with three or more women (compared to 58% of all-male boards) insist on conflict-of-interest guidelines; that more female than male directors pay attention to audit and risk oversight and control; that women, more than men, tend to consider the needs of more categories of stakeholders and; that women, more than men, tend to examine a wider range of management and organizational performance. The findings reveal that 72% of boards with two or more women conduct formal board performance evaluations, while only 49% of all-male boards do; that companies that provide boards of directors with formal, written limits to authority have a greater percentage of women directors than do organizations with no formal limits to authority and; organizations that provide boards of directors with formal orientation programs have a greater percentage of women directors than do organizations with no such program.
Gentlemen and ladies, start your engines! The economy needs all of us and it needs all of us right now!
Update: concluding the recent American Lawyer lead article on substantial recent declines in law firm diversity are the comments of DuPont’s and General Mills’ GC’s:
“Just listen to Roderick Palmore, general counsel of General Mills, Inc., whose 2004 Call to Action set off a major diversity push by U.S. general counsel. “The challenge is that we cannot look at these statistics and these results and sit still,” he says. “We’re in a dogfight.” Adds DuPont’s Sager: “I think [firms] ought to be concerned how [a decline in diversity] is perceived at law schools, in the legal community, and most of all, by their clients.”
1/ In the “old days,” these “kindnesses” included nights out at strip clubs and the occasional retention of a hooker for foreign clients. No kidding. And I was told early in my legal career (the late ’80s) that I could, if I wished, accompany the client’s CEO and the senior partner to the strip club if I wished to be part of this particular “networking” opportunity but I wouldn’t be blamed for foregoing it. I always forewent strip clubs. I could drink prodigiously with clients but I could not comfortably stick a hundred dollar bill into a stripper’s panties.
2/ Note that no one ever says “[t]he thing that got [him] hired, after all, wasn’t being a [man]. It was being a sharp strategist.” This article is from 2007, and the journalist must still make it clear that there are competent women out there to do jobs still seen as the domain of men.
Howard Gadlin discusses where he sees the mediation field heading in the next 25 years. It will become another reasonably established profession, credentialing standards will develop, standards and guidelines will...By Howard Gadlin