Few Gains for Women at the Top of Public Companies
by Liz O’Donnell (Boston)
Slim to none. These three words sum up the gains women have made in board rooms and executive suites according to the recent report, “Planning For Tomorrow’s Boardroom: Making Room For More Women.” The report was published by ION, InterOrganization Network, an alliance of twelve women’s organizations in California, Chicago, Florida, Georgia, Kansas/Missouri, Maryland, Massachusetts, Michigan, Tennessee, New York, Philadelphia and Wisconsin. ION studied the number of women on the boards of 1,336 public corporations in the twelve regions listed above. We have previously reported on the individual state reports from Massachusetts, California and Florida.
In reviewing, the number of women on boards, the number of boards with 25 percent or more women and the percentage of companies with no women at all, some states fared better than others. For example, public companies in the New York metropolitan area had the highest percentage of board seats held by women (17.6 percent), while companies in Georgia had the lowest (7.5 percent). New York also had both the highest percentage of companies where women held more than 25 percent of the seats (25 percent) and the lowest percentage of companies with no women directors at all (nine percent). Tennessee had the lowest number of companies with 25 or more female directors (13 percent) and Georgia had more than half of its companies (51.6 percent) reporting no women directors at all.
The report also revealed, not surprisingly, that women are not among the most highly compensated executives. Out of 1228 companies, 856, or just fewer than 70 percent, had no women among the highest paid employees. That may be because the number of companies with no women executives at all ranged from 25 percent in Michigan to 69.3 percent in Florida. Chicago had the highest percentage of women executive officers with 14.4 percent. Finally, the highest percentage of companies with female CEOs was New York with just 6 percent. Apparently, the old adage about the Big Apple doesn’t ring true for women. Just because you can make it there doesn’t mean you will make it in Kansas/Missouri where there were no female CEOs among the companies surveyed.
If there is any good news from the ION report, it is this. Approximately one-fifth of the company’s surveyed had board members age 70 or older and fewer than four percent of those directors were women. Also, of the four percent of the boards surveyed with directors who served 15 or more years, only 5.5 percent of those directors were women. That means there will be turnover on these boards resulting in an opportunity to right the gender inequities at these organizations.
ION proposed the following eight-step action plan to address the lack of women at the top of public companies:
- Identify strengths and weaknesses of current board through a comprehensive and rigorous self-assessment evaluation process within the framework of the company’s strategic plan and its marketplace.
- Develop a forward looking succession plan that addresses the gaps important to fill in the short term as well as likely emerging needs. A succession plan should reflect an attention to diversity including gender, race, background, international experience and industry and functional skill sets.
- Be open to change and willing to replace long time valuable directors to make room for new directors.
- Be flexible and seek candidates whose skills and experiences relate to the company’s strategic needs. Go beyond current colleagues and acquaintances to identify qualified candidates.
- Build a pipeline of future directors by developing relationships with potential candidates who are women and minorities as well as with individuals and organizations that can identify non-traditional candidates who meet the company’s needs.
- In board searches insist that the nominating committee interview and give serious consideration to women candidates; instruct executive search firms to include several women and minority candidates. Create a short list of all female candidates, especially if the board has no women directors.
- Do not engage in “tokenism.” Make sure that the board includes a critical mass of women and minority directors
- Reach out to ION and its member organizations to gain access to accomplished women with relevant experience in every sector of the global economy.
