How do farmer-owned cooperatives increase board diversity, when just 5% of their recruitment base are women?
Danish farmer-owned cooperatives are required to elect most of their board members through their own ranks, which hampers the recruitment of female board members. Despite that, the industry has reached the same level as other comparable companies, according to a new study.
Gender distribution among board members has long been a focal point in the public debate on equality, as the vast majority of them fall typically go to men. How, then, does is the gender balance in Danish farmer-owned cooperatives look, when the board members must primarily be members of the cooperative, and just 5% of those are women?
That is what Senior Advisor Henning Otte Hansen and Professor Mette Asmild have investigated in a study that has recently been published in Frontiers. While the cooperatives have historically lacked behind the general move towards increasing female board members, they have recently managed to increase the gender diversity significantly, despite their limited recruitment base.
“We had anticipated that this industry in particular would struggle with board diversity, as their membership base is so male dominated, giving them an incredibly slim recruitment base. And until just a few years ago, the level was extremely low. However, since then the farmer-owned cooperatives have managed quite a rise in female board members, going from an average of just 1% to around 18%,” says Henning Otte Hansen.
The development has happened over the past 15 years. Especially the largest farmer-owned cooperatives have strengthened the gender diversity of their boards, rising to around 20%. That is almost the same level as comparable companies that are not member-owned cooperatives, despite the limitations on recruitment that the cooperatives must adhere to.
External recruitment helps the balance
The study is based on data that the researchers have gathered from CSR-reports and annual reports, as well as websites of 25 Danish farmer-owned cooperatives. It shows that the cooperatives have worked purposefully towards compensating for the structural limitations that they have with recruitment.
Some cooperatives have done targeted campaigns among their members to increase female participation on their boards, and recruitment of external board members has been increased, of which the majority have been new female board members.
“The farmer-based cooperatives have really invested themselves in this problem over the last years, and even though it must have been difficult, they have managed to gain some ground,” says Mette Asmild. “They are still somewhat behind, but it’s tough to keep up with the general trend, when their structure for choosing board members is so member dependent, and their members are almost all men. They seem to have actively tried to improve those areas, where they can improve, and that it has worked.”
Both Henning Otte Hansen and Mette Asmild emphasize that the increase of female board members is a vital step towards challenging the barriers and taboos that may form the basis of the historically skewed gender balance.
“It’s probably both a cultural and historical issue that makes it difficult to find female board members, especially internally. Agriculture has always been a male-dominated profession. But there are some very clear goals towards having up to 30% women on their boards, and the cooperatives looks to take that very seriously. However, there is still a gap between the goal and what they have managed to far,” says Henning Otte Hansen.
Good governance and fresh perspectives
The move towards increasing women’s participation on their boards is according to Henning Otte Hansen most likely both a reaction to pressure from the surrounding society and the shared ambition to balance out the gender inequality, but also as part of a recognition that having a diverse board is simply beneficial for the businesses.
“It’s part of good governance to increase the diversity in one’s board, and especially the largest farmer-owned cooperatives have had a significant focus on that. Several studies have shown that it improves the board’s work when it’s made up of a good mix of women and men. You get more perspectives and angles on problems, and it can for example improve work methods and insights into markets and consumer needs,” says Henning Otte Hansen.
The study has found a clear trend that the bigger the cooperatives are, the more women they have on their boards. At the same time, the development among farmer-owned cooperatives is that the companies generally grow larger and larger. Therefore, the positive trend towards increasing female participation on their boards may continue to increase despite the slim recruitment base that the farmer-owned cooperatives have.
The awareness of increasing the number of women on company boards, both in general and in farmer-owned cooperatives, is an important step in itself, highlights Mette Asmild.
“Generally speaking, 20% is still low. It’s definitely not the case that there aren’t more qualified women than that. But it’s a start. There needs to be these trailblazers that bring new competences to board work and add to the skills that are sought after for board work, and also, for example, as representatives for the younger generations to see that company boards do not just consist of men in suits,” says Mette Asmild.
Henning Otte Hansen, Senior Advisor
Mette Asmild, Professor
Thomas Sten Pedersen, Communications Officer