I am not one to usually rant, but a study just released by Watermark, a non-profit community of executive women, and the University of California at Davis Graduate School of Management enraged me. It revealed that in California, among the 400 largest public companies, only 10 percent of board seats were held by women—and more than 33 percent had no women on their boards at all.
This isn’t just a California problem, says Watermark CEO Marilyn Nagel. She points to a new study of Fortune 500 companies just released by Catalyst showing women hold only 16.1 percent of board seats, and 10 percent have no women on their boards.
This shouldn't be the case in a world where women make 85 percent of household purchasing decisions, and hold 51 percent of the country’s private wealth, says Nigel. And making it worse, another Catalyst study indicates "sustained gender diversity in the boardroom correlates with better corporate performance?and not by just a little.” The survey asserts companies with women board directors consistently outperform corporations without women on the board in the areas of return on equity, return on sales, and return on invested capital.
Entrepreneur Gary Whitehill, who sits on advisory boards of F100 companies including Dell and AOL, agrees the lack of women on boards “absolutely hurts corporations. The data is clear,” he says, “there is a strong correlation between corporate financial performance and gender diversity in leadership.”
As an entrepreneurial woman, you may be wondering why you should care about all this corporate angst. Consider how much easier it could be to get a loan if more women sat on bank boards. And wouldn’t it benefit your business if you were recruited for a board seat?
So why, in 2012 does this inequity persist? Nagel suggests the still-existent old boy’s network doesn’t appreciate the value and diversity of thought adding women to their boards would bring. This perspective is echoed by Jeanne M. Sullivan, a general partner at StarVest, the nation’s largest women-owned venture fund. Sullivan believes boards need to recognize that they shouldn’t be recruiting members based on subject-matter knowledge (technology, financing, etc.), but rather should be seeking “effective leaders.” And she adds women need to learn to be more effective and, “find their voices, synthesize their opinions, and mentor other women” to do the same.
Lest you think this is just a bunch of women whining about their plight, Whitehill attributes the problem to the domination of the “male paradigm of culture and leadership. Gender bias is rampant at all levels of Fortune 500 companies, particularly at the highest ranks.” Never one to mince words, Whitehill adds, “Currently a directorship is considered a right for men; meanwhile women have to fight [their way] into these positions. This is an asinine reality—it must change.”
Nilofer Merchant, an innovation expert, and a corporate director for one public and two private companies, agrees the problem is rooted in “implicit bias. Decision-makers need to take steps to actively combat these biases because that's the only way their companies’ performance will improve.”
What makes this all the crazier is the fact that women often make better board members than men do. As Merchant wrote in her blog on the Harvard Business Review, “There is also evidence that women are more effective as board members. Reuters describes this phenomenon: among other things, women do more homework before board meetings and cause higher attendance rates overall.” Whitehill agrees, “Women tend to display a different set of characteristics such as requesting more facts and details…as well as seeking to broaden the scope of discussion.”
The climate is changing, and both Nagel and Sullivan see better days ahead, thanks to the ascent of Gen Y. Nagel says Millennials are “more inclusional, broad-minded and ask for what they want” while Sullivan believes Gen Y will likely provide “the sea change we’ve hoped for.” And Whitehill’s mother, Sallyann Whitehill, an entrepreneur with over two decades of corporate experience, notes, we’ve “at least come a long way from the days of men wanting to pat us on the head and give us a lollipop when we [were] so bold as to have an idea or opinion.”
Some European nations have mandated a certain percentage of seats on corporate boards be held by women, but no one I talked to believes the U.S. should follow suit. Merchant likens it to survival of the fittest, saying we don’t need quotas “because the companies [that add women to their boards] will outperform the others, and Darwinism wins out.”
Nagel, Sullivan and Merchant agree that women should be mentors helping other women acquire the skills and confidence to go for board seats. Watermark is one of several organizations that train women to be board-ready. You may think that sounds obvious, but Sallyann Whitehill says, [sadly, some women] “feel they must be ‘barracudas’ to fit into the largely male culture that still exists. Rather than mentoring other women they purposely destroy their own.”
Obviously women can’t change this by themselves. Men have to join the battle. Sullivan says “the men who are most enlightened are the ones who have dynamic wives, daughters, and mothers.” Proving that notion Gary Whitehill advises women to make “the conscious choice to work exclusively within [and I would add with] companies that “champion diversity at the highest levels,” because he says, “women deserve better.”
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