Boardrooms Need Greater Gender Diversity
An annual report of women directors and officers of public companies in a dozen major U.S. regions, published by the Inter-Organization Network (ION), found that women have made the smallest gains in joining public corporate boards since the group began reporting on the issue in 2004.
The report also revealed that women executives are moving up the corporate ladder at a snail’s pace. ION found that 70 percent of the 1,228 companies in its report had no wom- en among their top compensated executives.
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These numbers correlate to the findings of The Boston Club in its 2008 Census of Women Directors and Executive Officers of Massachusetts Public Companies, which found that the number of women directors and officers in Massachusetts’ largest public companies fell, and the number of companies with no women in the boardroom or executive suite increased significantly.
In the area covered by the Worcester Business Journal, six companies do not have women on their boards or in their executive suites: 3Com Corp., Cognex Corp., IPG Photonics Corp., National Dentex Corp., Perini Corp. and The L.S. Starrett Co.
In the current economic climate, companies that continue to ignore the business case for placing women on their boards, do so at their own peril. Good corporate governance requires that boards perform more stringent self-assessment, and more effective succession planning to correct gender and age inequities. Greater gender diversity will bring diverse and innovative business ideas, a critical issue in today’s competitive market.
Women’s presence on corporate boards sends positive messages to important stakeholders. Women’s presence plays a critical role in recruiting and retaining talented women executives, in attracting and retaining customers, shareholders, and vendors — audiences that are increasingly composed of women. Their insights and experience enhance corporate strategy, expand market share and drive shareholder value.
American women account for $1.5 trillion in business spending and $3.7 trillion in consumer spending. Women make 51 percent of consumer electronics purchases; 80 percent of health care purchases; and 50 percent of both new and used car purchases. Companies with women directors perform better financially, as reflected in market share and revenue growth. A company that draws on the critical insights and experience of women on its board can improve its corporate strategies and better serve its customers and its shareholders.
For those companies lacking gender diversity, the Boston Club and ION can help. We have a national database of board-ready women with areas of expertise that boards seek: risk management, ethics, operations, information technology, finance, and science.
The most effective boards of directors are not created overnight. They are the result of an ongoing process of succession planning, akin to the process that the best boards undertake in planning management succession. Now is the time for boards to begin this process.
JoAnn Cavallaro is the chair of The Boston Club’s corporate board committee. She can be reached at cavallaroj@rcn.com.
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