"Boards should reflect America, and the reality is, they don't. Women and minorities make up 70 percent of the U.S. population, but there are only two Fortune 500 company boards with that composition: Avon and Procter & Gamble," said Brande Stellings, vice president of Corporate Board Services for Catalyst Inc.
CLEVELAND, Ohio -- Study after study shows that companies with women on their corporate boards are 42 percent more profitable, less likely to have problems with fraud, and more likely to have the kinds of healthy, productive board meetings that characterize successful companies. So why has the percentage of women on boards flatlined?
Thompson Hine LLP's Spotlight on Women hosted a discussion Thursday night to dissect the problem and share strategies on bringing more women into the corporate boardroom.
Clik here to view.
View full sizeBrande Stellings, vice president, Corporate Board Services, Catalyst Inc. Brande Stellings, vice president of Corporate Board Services for Catalyst Inc., which strives to expand opportunities for women and business, said: "We do this census every year, and every year, we're writing the same headlines: 'We're stuck, we're stalled, we're stagnant, it's glacial.'
"Boards should reflect America, and the reality is, they don't," she said. "Women and minorities make up 70 percent of the U.S. population, but there are only two Fortune 500 company boards with that composition: Avon and Procter & Gamble."
Heidi Goldstein, a partner at Thompson Hine and co-founder of the firm's Women's Initiative, said: "For the eighth year in a row, there was no significant change in the number of female members of corporate boards, with women holding 16.9 percent of board seats in 2013, versus 16.6 percent" in 2012.
Even after women get on the board, "only 14.6 percent of executive officer positions were held by women, the fourth straight year of no year-over-year growth," she added. "Only 3.2 percent of all board seats are held by women of color, and 10 percent of public companies had no women on their boards... So said in another way, on average, U.S. company board composition is nearly 90 percent men."
Clik here to view.
View full sizeSally Gries, CEO of Gries Financial Sally Gries, chairperson and chief executive of Gries Financial LLC, said: "Women are compassionate, smart, strategic and emotionally very level, especially compared to some men I've worked with. We should be accepted for our skills -- not just because we're women."
She knows women who not only noticed the lack of other women in top roles, but challenged their male bosses to address it and help change the company culture. "You have to have the right climate, and you also have to be heard."
"There's a distinct link between gender diversity and better corporate performance," Stellings said. Having women on the board lowers a company's risk of insolvency and fraud and increases the likelihood of better board meetings. "Just having different viewpoints around the table helps disrupt 'group-think.'" Besides, she said, "You don't want to build a team with only half the room."
Clik here to view.
View full sizeAnn Harlan, CEO of Harlan Peterson Partners Ann Harlan, chief executive of Harlan Peterson Partners LLC and former Vice President and General Counsel for the J.M. Smucker Co., noted that that companies with more than two or three women on their boards tend to have lower incidences of fraud and financial reinstatements. "I don't think women are more honest than men or have better moral standards, but there is something about being willing to ask questions, like 'I'm not sure I understand why we do it that way.' Women are more likely to initiate that dialogue."
She said listening to women's perspectives also makes good business sense, because women have more buying power. She noted that Smucker, the Orrville-based maker of Smucker's, Jif, Folgers and other top food brands, is about to elect its fourth woman to the board next month, which would mean half of the company's independent directors are women. For consumer product companies whose sales depend on women, "knowing how they think and making sure their voices are in the room is very important," she said.
Some industries are better at welcoming women board members, including retail and consumer goods. "The No. 1 company with the most female directors is Avon, where seven of the 11 directors are female," Goldstein said. "Of course, that company is run by a woman, and I'm not sure that I've met many men with the same passion for mascara and eyeliner that we have," she joked.
Among the S&P 500, the percentage of women board members at consumer goods companies is 23.2 percent, and at telecommunications companies, it's 22.8 percent. Technology companies have an average of 7.1 percent female board members -- "even with female executives," Goldstein said. And despite how much time women spend online and with social media, only three of the 10 board members at Google are women, and only two of the 10 are women at Facebook.
So why is there such a gap between women who want to be on boards and the number of boards that have women? "This is a challenging situation that is compounded by two important facts: One, most board seats only open up every 10 years, and two, many corporate boards want CEOs, where there are again very few women," Goldstein said.
Facebook Chief Operating Officer "Sheryl Sandberg is telling us to pull up a seat at the table, but we cannot sit on someone's lap -- we need to make room for ourselves and have a voice in corporate America beyond the sectors that involve makeup and shopping," she said. Women need to share their advice for climbing the corporate ladder in heels.
Clik here to view.
View full sizeHeidi Goldstein, partner at Thompson Hine LLP Goldstein said too many CEOs say: "Sure I'd love to have more women on the board, but I just can't find any." Gries said that's the time to suggest they take a harder look around them, and not let them off the hook. When she was the only woman invited to a fellow CEO's exclusive ski trip, she gave him grief about not having enough women in his inner circles. And at her prodding, he appointed two women to his board.
Gries said women need to do a better job being their own advocates, managing their careers and their stories as well as they do their jobs. They need to consider what areas of expertise they possess that make them invaluable to someone else. "Spread your wings beyond your circle," she said.
Stelling suggested plugging into alumni groups, professional associations and nonprofit boards that align with your passions. She said having a sponsor who can advocate on your behalf is key, because "when people are looking at that that list of names, inevitably the question is going to be, 'Who knows this person?' Having that network of people who are willing to vouch for you is very critical."
Harlan agreed, noting that when new members are being proposed for the boardroom, "the question we ask ourselves is 'Who do we want in our foxhole?'" She praised J.M. Smucker Chief Executive Richard Smucker for being one of her strongest advocates and champions.
She encouraged women to do their own research about the boards they're interested in joining. "Know the company. Understand what the company makes and sells," she said. "What do you bring to that board? How can you add value? Make sure those values and interests are aligned. Make sure that this is a good fit."
Gries agreed. "Start with the annual report, so you know what the CEO is interested in. Read two or three years' worth. Look at their proxy statements, their strategic plan, their marketing plan. Talk to the CEO, talk to the head of HR, call customers and vendors, too. You have to do your homework before you're on the board and when you're on the board."
Goldstein said one article she read characterized women board members as "survivors," meaning the personal stakes are higher than they are for men. While 90 percent of male board members are married, versus 72 percent of women. Ninety percent of the men have children, whereas only 64 percent of the women do. "And the divorce rate among women on boards is 10 percent, versus 4 percent for men," she said.
Harland said one way to keep the momentum going beyond Thursday's meeting is by remembering that "one of the things that women do better than anyone else is selling their colleague's skills. It's easier for me to talk about how fabulous the women in this room are than to talk about myself."
That's why In Counsel with Women created a list of notable local women and their accomplishments, "and we give that list to every CEO in town."