Published in the San Jose Mercury News as Women in the board room: How to increase gender diversity on corporate boards.
Here are just a few organizations that are doing good work in this area.
by Barbara Kamm, President & CEO, Tech CU
The topic of women in leadership often comes up when I do interviews. It’s an ongoing conversation that I hope, one day, will not be among the things I get asked about. Why? When that day comes, it means we’ve reached parity and don’t feel the need to address leadership diversity as an issue.
Unfortunately, that day has not yet arrived. In 2013, just 16.9 percent of Fortune 500 board seats were filled by women1 — and women’s representation on boards has stagnated, gaining just two percentage points from 2006 to 2013.2 Locally, we’re not doing much better: 128 Silicon Valley companies (Santa Clara County) representing $1.2 trillion in shareholder value have just 6.6 percent of their highest-paid executive positions filled by women, and only 8.4 percent of Silicon Valley board members are women.3
It’s a shame when you consider that companies with “sustained high representation” of women on their boards significantly outperformed those with “sustained low representation” by 84 percent on return on sales, 60 percent on return on invested capital, and 46 percent on return on equity.4
In fact, international executive search firm Spencer Stuart did a survey in 2012 of U.S. corporate board members in which 80 percent agreed that diversity in the boardroom “generally results in increased value for shareholders.”5
Dana Kunz, CEO of MktLaunch and the Executive Director for the Watermark Board Access Program, suggests that “activist board members” paired with “activist candidates” are the two primary forces that will create change. C-level executives may be able to influence the process, but ultimately it’s the board that searches for and selects candidates.
Organizations like Watermark and others like Catalyst are doing important work in encouraging greater board diversity. Both groups are very active in helping board-ready women secure corporate director positions both locally and nationally. In addition they provide critical research that looks at the status of women in leadership positions. For example, Watermark sponsors the “UC Davis Study of California Women Business Leaders,” an annual report on the status of women in top positions at the 400 largest companies in California. Among its copious research, Catalyst publishes the “Catalyst Census: Fortune 500 Women Board Directors.”
There are also a few initiatives afoot, such as 2020 Women on Boards, which encourages publicly traded and private companies to sign a pledge to reach the goal of 20 percent of their board being women by 2020. California recently became the first state to pass legislation (Senate Resolution 62) that formally encourages corporations to voluntarily add more women to their board of directors.
In addition to supporting the initiatives underway, Bay Area business leaders and community influencers should also consider how to engage companies and encourage an increase in boardroom diversity. Here are a few ideas:
Most importantly, more women need to take things into their own hands. This means asking to be considered for a board seat on the companies they help create, build and acquire. It also means not shying away from giving voice to their professional desires, ideas, opinions, and even objections — and especially not selling themselves short.
Getting more women in executive and board positions will do more to bring other women into leadership roles than almost anything else. When women see others achieve and be successful, they can envision themselves doing the same and that accelerates change.
At Tech CU, we have three women among our nine board members (33 percent) and 55 percent of our managing committee is female. In addition, 25 percent of Tech CU’s C-level executives are women. We also work very hard to ensure our employees have a better understanding of and sensitivity to their colleagues through programs that focus on diversity training for things like race, gender, religion, and sexual orientation. As the CEO of Tech CU, I believe a diverse workforce makes for a stronger, more open organization.
I encourage my executive colleagues to join me in shedding light on the issue of board diversity in 2014. Among the many issues we face today, this seems to be one that has a fairly straightforward solution.
12013 Catalyst Census: Fortune 500 Women Board Directors. (December 2013)2Catalyst, The Momentum Myth: The Impact of Turnover On Women’s Representation on Fortune 500 Boards. (September 2012)3UC Davis Study of California Women Business Leaders: A Census of Women Directors and Executive Officers. (December 2012)4Catalyst, The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004-2008). (March 2011)5Spencer Stuart and Corporate Board Member, 2012 Boardroom Diversity Survey: Summary Report. (July 2012)
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