As discussed in my first article in this series, female leaders face significant hurdles in reaching PE-backed boards. Immense pressure and tight timescales mean investors and leadership teams tend to rely on existing networks and ‘known knowns,’ which works against women, who often come via a non-typical career path and already lack female role models at the top.
To dig a little deeper into the dynamics at play, we used our PACE behavioural analytics tool to compare and contrast the average behavioural profile of men and women who reach these board positions. Do men and women differ in their approach to leadership, as is often suggested? Is there a reason why women aren’t making it onto PE-backed boards? And how can behavioural assessments help to achieve greater gender diversity? This is what we discovered.
On average, male and female leaders are almost identical in their behaviours
Numerous studies have tried to determine whether there is a particular male or female approach to leadership, all with mixed results. In this case, our findings show that very little splits the genders behaviourally in a PE-backed environment. The average behavioural profiles of male and female board members are almost identical, with women tracking very slightly lower for pragmatism, curiosity, and execution, and slightly higher for agility. But overall, the findings suggest that gender is largely irrelevant; men and women in these roles display a very similar spread of behaviours.
Role disparity likely to be a key driver of behavioural differences
Furthermore, where we do see slight differences in male and female leadership behaviours, this is likely driven by the higher proportion of women in the Chief People Officer role compared to other C-suite positions (75% of CPOs are female). This means the female sample is skewed towards the CPO archetype, which tracks slightly lower for pragmatism and execution traits that enable these leaders to act as functional players while also taking responsibility for the evolution of the team. Consequently, they tend to take a longer-term view, and more advisory role, rather than the execution focus seen in other C-suite members.
Sub-behaviours aid cognitive diversity
Digging into sub-behaviours, some more pronounced differences between male and female leaders become apparent. Female leaders track higher for permissiveness, suggesting a greater tendency to navigate around and accommodate obstacles rather than attempt to transform them. They track significantly higher for collegiality, indicating they lean towards working cooperatively, rather than taking a challenging approach. A tendency towards balanced orientation and process motivation suggests they are more concerned with efficiency rather than challenge for challenge’s sake. And finally, they have a higher comfort in certainty, meaning they value the role of planning in reaching goals.
Again, these traits correlate with the CPO archetype, suggesting they are characteristic of the role rather than female leaders. They also help demonstrate the value of having a range of perspectives and behaviours around the boardroom table, whether that comes from women or men. We know from our research that the best-performing teams display a healthy variance and balance across behaviours to enable constructive challenge, and avoid groupthink.
Role of behavioural analytics in driving gender diversity
The shortage of women in PE-backed leadership roles means they only make up 25% of our sample size, plus female leaders are heavily skewed towards the CPO role, so these findings aren’t conclusive. However, the data highlights the importance of looking beyond external characteristics, such as gender, to instead focus on a leader’s capabilities and potential to drive value within an executive role.
A leader’s ability isn’t determined by gender, background, or ethnicity, but by behaviours, knowledge, and experience. By incorporating behavioural analytics, such as PACE, into the hiring process, investors and leadership teams can assess candidate behaviours against the role requirements, value creation plan, and existing team, to drive optimal performance and cognitive diversity.
Using these tools also encourages hiring managers and investors to look beyond the ‘typical’ private equity background or candidate, and feel confident shortlisting individuals with a non-traditional career path. They can also help to build a pipeline of female talent by identifying skills and competency gaps, where female candidates might need some development either ‘on the job’ or by taking on a shadow, or NED position, accelerating their journey to the top.
These are all vital components of increasing the female talent pool and seeing more women in these board-level positions. As the data shows, they can add as much value as men.
PACE is the LCap Group’s behavioural evaluation model that allows investors, and PE-backed leadership teams to understand their dominant behaviours, areas for growth, and team complementarity. It is the only behavioural evaluation benchmarked against private equity executives, and designed for the unique leadership demands of venture, private and growth capital-backed high-growth businesses. Try it out today here
This is the second in a series of articles exploring gender diversity on private equity-backed boards. Next, I’ll explore the steps that PE houses are taking to address the issue, with comments from PE leaders. Keep an eye out for that.
I’m very keen to work with private equity houses to find solutions to the gender diversity challenge, in particular by creating female talent banks by giving women the opportunity to take on shadow roles to build up their experience and competencies. If that is of interest, please don’t hesitate to email me here to discuss further.
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