Women in the Corporate Boardroom
By Nancy Zurbuchen and Linda Bolliger

May 2005

Why don’t we see more women in the corporate boardroom? Is it under-qualification of candidates, or just plain old discrimination? Is change on the horizon? 

Women hold 16% of the board seats among the top 500 of the nation's biggest public companies, a figure which has grown significantly in the last 4 years. Compare that figure to 12% in 2001; 11.2% in 1999; and 11.1% in 1988. The number of top offices (CEO, president, CFO, COO, chair, vice chair) held by women at Fortune 500 companies is also on the rise:  currently it stands at 8%, including seven female CEOs.* These are positions that translate into board positions, so collectively these statistics are a leading indicator of potential boardroom trends. Based on this data the growth of women represented on corporate boards should continue to grow.

In addition, women in the corporate executive suite are well-matched by their contemporaries who now head top rated universities, represent constituencies in state legislatures and in Congress, serve as top leaders in the military, and now own and operate almost half of all American small business enterprises. While following the path trod by their male counterparts, women have clearly surmounted the hump in the bell curve of business and every other type of leadership that previously propelled men into the corporate boardroom.

But is it enough to propel women into the corporate boardroom? Other forces are coming together which could help to ensure that the answer is ‘yes.’ The most effective external force is the fallout created by failings of the governance system, which was heralded by headlines involving scandals at Enron, WorldCom, and Global Crossings. Corporate reform legislation, such as Sarbanes-Oxley (2002), are now requiring companies to move beyond the CEO-centric board service model, which underscores a long-standing need to look further and wider for good talent. In other words, corporate reform legislation has opened the boardroom door a crack and emptied some seats, thus creating greater opportunity for women to fill them.  

Interestingly, Catalyst* recently released findings that the Fortune 500 companies who have the highest representation of women in their top management teams also have an average shareholder return that was 34% higher than companies with the lowest representation of women. Carla Carstens, who sits on the board of the Lou Holland Fund, declares that along with skills and expertise women bring the advantage of a fresh perspective into the boardroom – a perspective that represents over 50% of our population. Supporting this viewpoint is Judy Rosener, PH.D, author of America’s Hidden Secret, Women in Top Management. Dr. Rosener makes her case that women are “America’s competitive secret” in the global market. She points out that women make over 80% of all consumer purchasing decisions and that customer-focused businesses need women’s insight, knowledge and expertise if they are to maximize profits. Considering these numbers, any concern about women being qualified for board service reveals the insular nature of the corporate candidate selection process. The results in the past have been a singularly homogenous group, as the profile of an average board member reveals: predominately male, predominately Caucasian, and predominately corporate.

Closing the gender disparity gap on corporate boards has led to a growing industry niche: board service education and readiness training. Leading business schools such as Harvard and Northwestern now offer board training in their business schools. The Director’s Council in Phoenix was founded to help companies tap into the growing talent pool comprised of women and minorities. National associations have begun stockpiling resumes to pass on to companies. Locally, the Central Exchange is focusing efforts on grooming and promoting high-level corporate women interested in becoming effective board members. The Kansas City Council of Women Business Owners has actively collaborated with Boardroom Bound, a Washington, D.C.-based organization focused on training and placing women and minorities on corporate boards. Even business executive search firms are getting more requests for recruitment of women for corporate boards, according to William Shulman, Managing Partner, EmployeeROI.

The bottom line is that recent governance reforms combined with women’s ascent into high-level leadership positions are paving the way for a different style of corporate leadership in the executive suite. The net result will be a significant increase of women in the corporate boardroom. Whether that leadership translates to better governance remains to be seen.

Authors:
Nancy Zurbuchen,
President, Motional Multimedia and Co-founder, Kansas City Council of Women Business Owners (www.KC-CWBO.org)
Linda K. Bolliger,
Founder & CEO, Boardroom Bound®, Washington, D.C. (www.BoardroomBound.biz)
*Catalyst is a New York-based research organization, www.catalystwomen.org  

This article appeared in the KC Small Business Monthly in May of 2005.