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- Read the case study: Should a Female Director “Tone It Down”?
- Review the PPT Case Study Supplemental Notes
- Consider these questions:
- How much of the problem that Sarah is encountering can we ascribe to gender bias? Does the organization hold her to a different set of behavior standards because she is a woman?
- What are her options for being effective, given this possible bias?
- Has Sarah’s personal style had a role in creating the situation she faces? If so, what role?
- What options does she have for repairing her relationships with the board and the management team? Should she “tone it down” or “stick to her guns”? What should Sarah do now?
Should a Female Director “Tone it Down”?
Supplemental Material for Case Discussion
HPT008
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COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
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J.P. Offutt
Sid Yerby
Bill Offutt
Sarah
Other Board Members
Fiduciary
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Should a Female Director “Tone it Down”?
Defined: a person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets for the benefit of the other person rather than for his or her own profit.
Duty of loyalty: requires a fiduciary to act solely in the best interest of the company and serve the corporation for the shareholder.
Duty of care: requires directors to be informed and involved in business decisions of a public corporation. A director is obliged to take all necessary actions to make fundamentally sound business decisions.
COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
Statistics on Women on Fortune 500 Boards
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Source: Catalyst, 2014 Census, Women Board Directors
.
Should a Female Director “Tone it Down”?
WOMEN’S SHARE OF BOARD SEATS AT MAJOR COMPANIES IN 2014
Norway 35.5%
Finland 29.9%
France 29.7%
Sweden 28.8%
Belgium 23.4%
United Kingdom 22.8%
Denmark 21.9%
Netherlands 21.0%
Canada 20.8%
United States 19.2%
Germany 18.5%
Spain 18.2%
Switzerland 17.0%
Austria 13.0%
Ireland 10.3%
Portugal 7.9%
COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
Components of Emotional Intelligence
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Source: Goleman, D. “What Makes a Leader?” Harvard Business Review, June 1996
Should a Female Director “Tone it Down”?
Self awareness – knowing your strengths, weaknesses, drives, values, and impact on others
Self-regulation – controlling or redirecting disruptive impulses and moods
Motivation – relishing achievement for its own sake
Empathy – understanding other people’s emotional makeup
Social skill – building rapport with others to move them in desired directions
COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
GENDER
Should a Female Director “Tone It
Down”?
by Boris Groysberg and Deborah Bell
FROM THE OCTOBER 2014 ISSUE
HBR fictionalized case studies present dilemmas faced by leaders in real companies andoffer solutions from experts.
Finally, Sarah thought. J.P. Offutt, the CEO, had named a time when they could meet.
Sarah was a director of the company that J.P. ran, a Florida-based shopping-center-development
group, and she was devoted to both him and his firm. But board meetings had been tense recently,
and J.P. had grown distant.
In Sarah’s opinion, the problem was obvious: Sid Yerby, the CFO. Despite Sarah’s repeated requests
for comprehensive financial statements, he continued to come to board meetings with a mere two
pages of analysis that lacked any explanation. How could she or any of the other directors provide
fiscal oversight without access to details of the company’s operations or accounting?
Increasingly, however, hers seemed to be the minority view, and she was starting to feel isolated.
Some months back, J.P. had told her privately that he appreciated her persistence with Sid. The
young and inexperienced CEO confessed that he often felt uncomfortable asking tough questions of
the CFO, an industry veteran who was 10 years his senior. It didn’t help that J.P.’s father, Bill Offutt,
who had founded the company and remained its chairman, didn’t seem bothered by the lack of
documentation.
https://hbr.org/topic/gender
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Sarah, an experienced real estate consultant, had always been happy to help. But the clamor against
her from Sid and the other board members was growing uncomfortably strong. In fact, one of her
fellow directors had accused her of having a private agenda that included taking the CFO down a
couple of pegs. Another said to her face that she talked too much, just like his teenage daughter.
Outwardly Sarah balked at this, but inwardly she was intimidated, especially because she was the
only woman on the board. Even Bill, who had recruited her as a director and praised her stick-to-
itiveness and gumption, had commented that others considered her “pushy.” It was high time, she
thought, that J.P. sprang to her defense.
The Previous Quarter
As Sid clicked through to a liquidity projection slide, Sarah allowed herself a small smile. It was a
minor victory, but a victory nonetheless. Two weeks earlier, J.P. had pulled her aside and asked her
to stop arguing with the CFO. Initially she was taken aback. Arguing? She was just asking questions.
Besides, she’d been under the impression that J.P. wanted her to question and challenge Sid.
Nevertheless, she decided to try a new approach: Before the board meeting she had called Sid and
suggested that his presentation include certain essential details, such as the liquidity projections.
Still, he had to know that the inclusion of a single additional slide wasn’t enough. After he finished,
Sarah raised her hand. She could hear the sighs around the table. “Sid,” she said, “I want to
commend you for the additional information you’ve provided. But as I mentioned when we spoke a
few weeks ago, it would be helpful to have even more information. For example, how do our
financial ratios compare with the rest of the industry’s? And what about best-, base-, and worst-case
scenario projections?”
Everyone started talking at once. Sid turned to Bill with a shrug, as if to say, “You see what I have to
deal with?” Bill quieted the room by tapping his pen on the table. “We simply can’t fight over every
financial report,” he said. “Everyone here is an experienced business leader.” Using the pen as a
When Sarah raised her hand, she could hear the
sighs around the table. The chairman quieted
the room and said, We simply can’t ght over
every nancial report.”
pointer, he continued, “Avery is the CEO of a trucking company, Louis runs a bank, et cetera. They’re
very comfortable reading financial summaries, and they don’t want to waste their time getting into
the weeds.”
“But it’s our fiduciary duty to get into the weeds,” Sarah said. “Even though we’ve had a steady rise
in our stock price, we’ve been relying more and more on buying underperforming assets using
floating-rate debt, assuming that the assets will stabilize and we can refinance at lower rates. But
that’s a big assumption, and the board deserves more detail about why that’s our strategy.”
Rather than address those issues, Bill ended the discussion and moved on. It burned Sarah up. Fine
—she would be quiet for now, but that night she wrote J.P. a letter that pulled no punches, for the
first time formally documenting her concerns about the company’s strategy and Sid’s reporting
standards, which she felt were far too casual for a big real estate investment trust, or REIT. The letter
also asked J.P. for a one-on-one meeting in the week after she came back from a vacation with her
husband and their four children.
Sisterly Advice
Before leaving for vacation, Sarah had her monthly dinner with her sister Betsy, a biotech
entrepreneur. Although they both juggled work and large families, they remained close and engaged
in each other’s lives.
It was while Sarah waited for her sister at their favorite restaurant that she received the affirmative
response from J.P. She was relieved he’d agreed to meet, but there was a nervous twinge in her gut
that wouldn’t go away. J.P.’s e-mail was terse, and she found it unsettling.
As Sarah greeted Betsy, she tried but failed to wipe the worry off her face. “What’s wrong?” Betsy
asked immediately.
“It’s that board I’m on—the real estate company.” Sarah exhaled loudly. “Did you know we’re now
the second-biggest REIT in the country? We own hundreds of properties, and we’re making tons of
money. But the management team still wants the company to function like the small family business
it was years ago. I can’t tolerate that. And I especially can’t tolerate our CFO Sid Yerby’s casual
approach to the numbers.”
“I know—you’ve talked about him,” Betsy said.
“He’s like an overconfident cardsharp who bets high on a pair of deuces. Nobody calls him on it
except me. By the way, many times when I’ve grilled Sid over his numbers, it’s been because J.P.
asked me to do it. J.P. once told me he couldn’t run the company without me. But now it seems like
he’s giving me the cold shoulder and giving Sid free rein.”
“What exactly is Sid doing wrong?” Betsy asked.
“Well, back in 2011, we made a few big acquisitions that gave us a lot of great properties but also
stuck us with billions in debt, most of which had to be financed with short-term paper. The company
is now highly leveraged—much more so than any of our competitors. Sid says property values have
stabilized, the consumer is back in the saddle, and there’s nothing to worry about. But what if we hit
another downturn? No one else seems concerned.”
She sighed. “All the other directors hate it when I grill him. They think I have some private agenda.
But I don’t, except the interests of the company.”
“In all your grilling, have you ever uncovered anything nefarious or illegal?” Betsy asked.
“No,” Sarah replied.
“Incompetent, boneheaded, sloppy?”
“No, but—”
“Misguided, rash, questionable?”
“Well, I do think many of his choices are questionable, especially around our leverage,” Sarah said.
“But he did get your company through the mortgage crisis and the recession in good shape, right?”
Betsy countered.
“Yes.”
“Well, rightly or wrongly, that may be one reason why you don’t have a single ally on the board.”
In J.P.’s Ofce
Sarah and J.P. sat opposite each other on the short leather sofas in his office. He looked nervous.
“Sarah, you know my own capabilities are limited,” he began. “I don’t know everything there is to
know about business, and I never will. And as I’ve said to you before, that’s why I can’t run this
company without—” he hesitated.
Sarah filled in the rest. “Without me. I know. And I appreciate that.”
“No—sorry. Without Sid.”
She stared at him, unsure what to say.
“Sarah, your intellect is very powerful,” he continued. “And your questioning, especially on financial
matters, is very informed and insightful. What you have to say is always important.”
“But?”
“But Sid has expressed his frustration with the situation on the board, and in fact, he’s prepared to
tender his resignation.”
“Really?” This was exciting news, Sarah thought.
“He’ll stay if you, well, as he put it, ‘tone it down and back off.’”
Sarah was stunned—so much so that she had to exert considerable effort to bring herself back into
the conversation. She realized then that J.P.’s expression showed more resolve than she was used to
seeing in him. Was he truly giving her an ultimatum: Shut up or leave the board?