California’s Glass Ceiling

by Liz O’Donnell (Boston)

The World Economic Forum 2008 Global Gender Gap Report released last month may show that women are making progress worldwide, but a report closer to home tells a bleaker story, even in one of the most progressive states in the Union. The University of California Davis just released its fourth annual study on women in the 400 largest publicly held companies headquartered in California and it reveals there is only one woman for every nine men at the executive levels of these companies.

The UC Davis Study of California Women Business Leaders: A Census of Women Directors and Executive Officers is cosponsored by the University of California and the Forum for Women Entrepreneurs & Executives (FWE&E), a non-profit focused on women in business. The goal of the study is to highlight the need for greater participation of women in executive positions and on corporate boards. Unfortunately, little has changed since the first report was published four years ago. Women in the 400 largest publicly held California companies hold only 10.9 percent of board seats and executive positions. This number is just a slight increase over the previous year. Last year that number was 10.4 percent.

Diane Danielson, CEO of the Downtown Women’s Club, which has clubs in San Francisco, Los Angeles and San Diego, is optimistic that the gender mix will change at the top.

“When times get tough people are willing to look for any alternative that works and they will be gender, race, and age blind,” Danielson says. “We saw this in our recent election of Senator Obama. In addition, we can’t keep the current management in — as the status quo isn’t working. So hopefully women will be the beneficiaries as well as other under-represented groups.

“Finally, women tend to thrive in chaos because they have been forced to operate ‘outside the old boy’s club’ for so long that they have hopefully developed networks and other means to help move them up in a time of crises,” she added.

There has been more progress with board positions than with executive jobs. Women represent 10 percent of board seats at these companies, up from 9.4 percent in the previous year. However, in the last year, 173 of the 400 companies appointed 313 new directors and only 15 percent of the vacancies (47 positions) were filled by women. This was a lost opportunity especially in light of the recent Catalyst study that reported Fortune 500 companies with the highest representation of female directors, have higher financial performance than those with the lowest female representation.

Still, just under half (46.8 percent) of the 400 companies surveyed have no women directors at all and 31.3 percent of them have only one female director. The size of the surveyed companies’ boards range from four to 19 directors, with the average being eight.

The most likely industries to have female directors are the pharmaceutical, media and financial industries. The least likely are telecommunications, semiconductor, and food and leisure. The companies with revenues of $5 billion or more have the largest boards and the highest percentage of women directors (15.4 percent).

“The only thing that could hold women back is a continued reluctance to learn and embrace technology.” says Danielson. “Technology has helped kill ‘command and control‘ infrastructures which benefitted the older white males. We need women, and others, to lead us into whatever the next generation of corporations will be.”

There has been a decline in female participation at the top levels since the last survey. This could be due to two factors. The first is that 26 of the first-time participant companies this year have all male executive teams. The second is that with so few women at the top, when one steps down, like for example, Meg Whitman, former CEO of eBay, the impact is great. In total, 15 companies have lost their women executives since the 2007 survey.

Each of the 400 companies in the report has six male executives on average. However only 87 of those companies (21.9 percent) have two or more women at the top. Media, retail and financial companies are the most likely to have at least one women executive; the financial sector has the greatest percentage of women at the top. In fact, Nara Bancorp Inc., which is run by a female CEO, has filled five out of its six executive positions with women. Two of its eight directors are women as well.

California, like the rest of the country, still has a long way to go to realize gender equality in the work place.