New FWA Report: Optimistic Outlook Despite Discouraging Numbers

FWAreportBy Melissa J. Anderson (New York City)

“I think that the numbers pretty much speak for themselves,” said Ziporah Janowski, co-chair of the Financial Women’s Association of New York’s Corporate Governance Committee. “They’re discouraging.”

The 2009 FWA100 Study:The Time Has Come, released last week, analyzes the presence of women at the highest levels of major corporations in New York. According to this year’s report:

“On an aggregate basis, the percentage of board seats held by women in the overall population remained virtually unchanged at 17.8% (17.6% in the 2008 study). Women gained a net total of one board seat. The number of companies in the sample with no women on their boards actually increased from 9 to 11 this year, a 22% increase.”

But rather than dwell on the negative aspects of the report, Janowski said, “we want to focus on positive signs of change.”

Looking Forward – Already Seeing More Women in Leadership Roles

The percentage of women in board seats has remained relatively flat for the past three years that the FWA has preformed the study. So has the number of women in C-level positions. According to the report:

The composition of the C-Suite also changed very little… Women held about 9.8% of these positions in the current study, compared with 10.3% in the 2008 study. …The number of FWA100 companies with no women included among their most highly compensated executives increased from 58 to 65, an increase of over 12%.

Janowski said, “We’re seeing very little change. That isn’t going to do it for us – or for corporations, by the way.”

“When we did the report last year, the issue got no attention.” Citing the recession, she explained, “The topic of diversity on boards had to take a back seat, and I think that’s reflected in these numbers.”

But the numbers are changing. The report notes that although the data for 2009 is disappointing, new rules implemented by the SEC “requiring disclosure concerning board members and nominees’ backgrounds and qualifications” are already helping women gain board seats. “Directors & Boards Magazine, using third quarter 2009 data (which is outside the research period of the 2009 FWA 100 study) announced that 43% of newly appointed directors are women – almost one out of two board appointments.”

“Going forward with economic improvements, the SEC rules, new sources [to hire women], I believe that there will be a change.” Janowski also cited influence of legislation in many European nations reserving a certain percentage of corporate leadership for women. “This is happening. You’d think companies would want to do this on their own,” she said, rather than wait to have gender quotas mandated by the government.

Steps to Get More Women into Leadership Positions

What are the top ways we can improve the number of women in leadership positions? Janowski said, first of all, “Boards need to be a little braver.” She continued, “Companies are still mired in the old ways of finding directors. In the past they were plucked from a CEO position. They need to think outside that traditional box.”

“The process by which directors are found – ‘who do you know’ meshes nicely with who is already there,” she explained. Rather than relying on the safe bet, boards need to reach out to new pools of applicants – for example, through recruiters. Janowski also mentioned that the FWA boasts a membership of “tremendous numbers of qualified women.”

On the other side, she said, “Women have a responsibility here. I don’t think women are doing all they can to be found.”

She explained, “be more strategic” For example, “Let the CEO know you’re interested in board service” – even if not at your own company, your boss may have connections elsewhere. “Make contact with a recruiter,” she advised. And “develop expertise – be prepared.” Boards are looking for hard skills – you should be able to impress them with your abilities if you want a seat.

And of course, “Join the FWA,” she added.

The full report is available on the FWA’s webiste. A PDF version can be accessed here: 2009 FWA100 Study: The Time has Come.

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    I have read this report, and put my own preface to it as the President of the FWA. It is my hope that this report represents the trough, and we can only go up from here. As Ziporah rightly points out there are several factors now in play that should work to improve this situation. FWA’s committee on Directors and Corporate Governance is one of the key ways FWA both educates and promotes issues central to having more women in the board room. To join this wonderfully talented committee, the first step is to join the FWA… On April 19, we will be having the head of the SEC speak, Mary Shapiro, interviewed by CNBC’s Mary Bartiromo. The new rules of the SEC will, we hope, be a positive factor going forward. Hope to see you there!