Regional Organizations Urge Corporate Leaders to Promote Women to Boardrooms and Executive Suites
Philadelphia, Pennsylvania - February 16, 2006 - New research about women directors and executives in seven key U.S. regions concludes that only a proactive effort by corporate leaders will propel women into boardrooms and executive suites. "Time for a Charge," the report issued today by ION, urges corporate leaders at public companies to change the face of corporate leadership and governance, adding more qualified women from the pipeline of candidates that already exists.
The members of ION - The InterOrganization Network - include The Boston Club, The Chicago Network, The Forum of Executive Women (Philadelphia), Board of Directors Network (Atlanta), Milwaukee Women inc, Inforum (Detroit) and Women Executive Leadership (Florida). ION, a term referring to an electrical charge, was adopted as the name for this organization to define how executive women's networks combine their energies to increase the presence of women in corporate boardrooms and executive suites.
While the ION report shows positive steps forward in some regions, there were also some major steps backward. Overall, the slow rate at which women are making their way into the companies' boardrooms continues, based on comparisons from last year's ION report.
The percentage of companies without a woman on the board continues to be significant: in Georgia (54.0%), Florida (52.4%), Massachusetts (45.0%), Philadelphia (43.4%), Michigan (40.0%), Wisconsin (36.0%) and Chicago (12%). That percentage has increased in some areas, even among Fortune 500 and Fortune 1000 companies, where women traditionally hold more board seats than in smaller companies.
"The snail's pace at which women are making their way into corporate boardrooms is simply not acceptable," said Vicki Kramer, chair of ION's Executive Committee. "It makes good business sense to have more women represented at the table where decisions are made. This truth has been borne out in study after study. For example, The Economist recently reported that research from America, Britain and Scandinavia shows a strong correlation between shareholder return and a higher proportion of women in the executive echelons."
A promising note came from the findings about board nominating committees, a topic ION's members researched for the first time. Massachusetts led the list of companies with women on reporting companies' Nominating Committees (32.0%), while Wisconsin came in second (29.4%). Three other areas reported women on companies' Nominating Committees including Michigan (28.0%); Philadelphia (26.3%); and Georgia (24.1%). The report points out that, "because of the critical role that these committees play in the identification and recruitment of new directors, the presence of women on them has the potential to accelerate the process of change."
Kramer cited the remarks of Shirley Tilghman, the first woman president of Princeton University, to put into perspective the importance of women being added to Nominating Committees. "In this case, I agree with Tilghman who said, ÔThe world works on lists. If a woman is involved in constructing those lists, the likelihood of selecting really terrific women goes way up.'"
When it comes to women in executive suites, no region had more than 15.4% (Chicago) female representation in the companies' top executive ranks. From high to low, the percent of total executive officers who are women followed this ranking: 11.0% (Wisconsin), 10.2% (Philadelphia), 10.1% (Massachusetts), 8.2% (Georgia), 7.7% (Michigan) and 7.6% (Florida).
Even more startling were the percentages of companies without a single woman executive officer. The figures by area were: 79.0% (Michigan), 65.3% (Florida), 62.6% (Georgia), 55.6% (Philadelphia), 48.0% (Massachusetts), 36.0% (Wisconsin) and 30.0% (Chicago).
Companies without women in leadership positions are not likely to be delivering to their shareholders the same returns as their counterparts with better representation of women, according to recent research. Citizens Advisers, Inc. of Portsmouth, New Hampshire, focusing on the 298 companies in its Index, found that the total and average annual return on the stock of those companies with the highest gender diversity on the board and in the upper two levels of management was several percentage points higher than that of the companies with the lowest gender diversity. In addition, the stock of the companies with more women had less volatility or risk than those with fewer women.
At the beginning of this year, Norway legislatively mandated that 40% of its public companies' board members be female. Although 16% of the board seats in the country were held by women, the government wanted the proportion of women in the boardroom to mirror women's presence in that country's population. ION expects American businesses to be as progressive as Norway's without being legislatively prompted to do so.
Each of ION's member organizations publishes an annual census report on the status of female executive officers and women directors in public companies in its respective geographic area. Detailed analysis of the geographic-specific results can be found on the participants' respective web sites.
To download a PDF of the ION Report, visit www.foew.com.
For more information and interviews, contact:
Malli Gero 617-277-1675
malli@gerocom.com |
