By Dr. Paul Dunn

In June 2012, Sheryl Sandberg, who had been a vice-president at Google Inc., was hired to be the chief operating officer of Facebook Inc. reporting to Mark Zukerberg, chairman and CEO of the company that he founded. On that same day, Sandberg was also appointed to the board of directors, becoming the first female to join Facebook’s board.

This raises an interesting question. What does it take for a woman to join an all-male board of directors? The following is a summary of my study on the characteristics of new female corporate directors who break the boardroom gender barrier.

Human Capital
Human capital represents the unique skill set that each director brings to the boardroom table because of that individual’s schooling, training, and work experience. One of the functions of directors is to provide advice and counsel. Each director’s human capital allows that director to bring a unique perspective to problem solving and decision-making. Engineers, for example, view problems differently than financiers. The former tend to focus on processes, while financiers concentrate on economic consequences. Having multiple perspectives in the boardroom should enhance the quality of the decision making process, and hopefully result in better strategies for the firm.

The following is a useful typology for classifying corporate directors according to their human capital characteristics

• Insiders – these are either current or retired executives of the firm.
• Business experts – these are executives at other for-profit firms.
• Specialists – these are individuals who work in specialized areas, such as banking, law, finance, the government, or accounting.
• Generalists – these are individuals who are management consultants or professional corporate directors.
• Service sector providers – these are senior officials who work for hospitals, universities, and other organizations in the non-profit sector.

New Female Corporate Appointments
The research question is: when an all-male board decides to increase the size of its board of directors, what human capital characteristics does it look for when the new appointee is a female?

I examined a sample of 193 women for whom this was their first appointment to the board of a publicly traded company in Canada. Of these new female corporate directors, 82 were appointed to all-male boards, while 109 joined boards that were already gender diverse.

What were the human capital characteristics of these women who were appointed to these 82 all-male boards? They tended to be insiders and specialists.

An insider is a female executive who would be known to both the CEO of the firm and the board of directors. The CEO would be quite familiar with her skill set, since she would be reporting to the CEO. As a senior executive she would have been invited into the boardroom to make various presentations to the board. Furthermore, she would have firm-specific knowledge  gained as a manager of the firm. So, if the CEO and the board are looking for a new board member, they need look no further than the woman sitting in the executive suite of their own firm.

Directors bring a variety of skills to the boardroom table. In my sample of firms, when all-male boards are looking to increase their members, they turn to women that have specialized skills in such areas as banking, law, finance, the government, and accounting. These women have highly specialized skills in unique areas. Knowledge of law, banking, finance or accounting is a critical resource that is important to boards of directors. Women who have this area-specific knowledge are a valuable asset to the firm. When firms choose to break the gender barrier, they do so by looking for women who can bring these highly unique and specialized skills to the boardroom table.

The Route into the Boardroom
Overall, the results of my study indicate that when an all-male board chooses to invite a woman to join them in the boardroom, they want a woman who has specialized knowledge, derived either because she is an executive of the firm (firm-specific knowledge) or because she is a specialist (with area-specific knowledge).

So, the easiest route into the boardroom is for women to acquire specialized skills, either with the firm or in a specialized field. However, as firms move to having fewer insiders on their boards, the easier route may be for women to acquire expertise in such specialized areas as banking, finance or accounting.

Dr. Paul Dunn is an associate professor of accounting at the Goodman School of Business, Brock University. His research focuses on issues in accounting, ethics, and corporate governance. He can be reached at pdunn@brocku.ca. The full length version of his study that is summarized in this article is “Breaking the boardroom gender barrier: The human capital of female corporate directors,” Journal of Management and Governance (2012) 16: 557-570.