Women in Business: Little Progress on Boards
Corporate board seats, nationally and in Pittsburgh, continue to be overwhelmingly filled by men
by Patty Tascarella, Pittsburgh Business Times
More women are serving on corporate boards, but that's not to say they match or challenge the dominance of male directors.
Women accounted for 15.2 percent of board seats in the Standard & Poors 500 last last year, up from 9.6 percent in 1997, according to Catalyst, a New York City-based nonprofit membership organization focused on expanding opportunities for women and business.
"That's progress, but it's not really dramatic," said Sarah Stewart, a principal at Boyden Global Executive Search.
Stewart, based in Boyden's O'Hara office, has worked in board recruitment for 20 years.
"I think that works out around half a percentage point a year," she said. "If we continue at that rate, it will be about 75 years before women make up half of a board. That's frustrating."
Corporate Pittsburgh is a bit behind the S&P 500's pace.
Stewart looked at 28 public companies in Allegheny County that have revenue of more than $100 million and found that women hold 13.2 percent of total board seats. A few companies did not list any women directors.
"There's room for improvement," Stewart said.
Nationally, companies that were quickest to diversify, she said were in the consumer, apparel and financial services sectors, "where it made obvious sense." But companies that don't have as much of a consumer component, such as some serving the oil and gas segment, tend to have fewer women directors. Technology is another area where there are fewer women on boards.
"The tech sector has been known as a place that's a meritocracy, but if you look at those companies, they don't have many women on boards," Stewart said. "Part of that is the natural evolution that when a company is just getting started, the management team tends to stick to its own network. It's not until those companies achieve a certain scale that they begin to look at the diversity balance."
In the nonprofit world, the equation is a bit different.
"I think the nonprofit community has always reached out to include women on their boards," said Kate Dewey, principal of Dewey & Kaye, a McCrory & McDowell company that consults to nonprofits. "Regional economic development nonprofits lag behind other fields in having a significant representation of women serving on their boards or officers."
She said this is because fewer women hold top position in the corporate community.
"It's the position that creates the board seat as opposed to the individual, and because women still lag in being in leadership positions, it mostly falls to men," Dewey said.
She said the Allegheny Conference on Community Development "probably does the best," with two women among the seven officers of its board of directors. They are MARC USA CEO Michele Frabrizi, who is secretary, and Kimberly Tillotson Fleming, president of Hefren-Tillotson Inc, who serves as treasurer.
There are various routes for-profit companies take to appoint women directors. Some specify that they will only consider women candidates. Some are referred by existing directors who serve on nonprofit boards with women.
"If you're on a nonprofit board, it's a way of establishing a track record, and you're probably serving with other corporate executives so that whole networking thing comes into play," Stewart said.
Dewey, on the other hand, said being on a nonprofit board neither helps nor hinders anyone's opportunity to join a for-profit board.
C-level executives often are asked to join for-profit boards, Stewart said, as well as certain service professionals. She said women who want to serve on for-profit boards should "make themselves visible" outside their own company.
David Hunter, chairman of Downtown investment firm Hunter Associates and a former chairman of Nasdaq, has served on the nominating committees of for-profit boards. He recommended becoming active in industry organizations and serving on nonprofit boards, ideally taking leadership positions.
"Work your way up the ranks," Hunter said.
Stewart suggested speaking on business issues whenever the opportunity arises and "getting to know the people who can help connect you."
Companies' wish lists have been adjusted, too, which increases the chances that women executives will be asked to join corporate boards.
"It used to be, every client we worked with wanted an active CEO for a director," Stewart said. "But it's hard for (CEOs) to make a lot of commitments, so we look at other operating executives who handle important strategic functions such as international, marketing and financial."
Another issue may be the availability of board candidates. Not all women executives strive to be directors.
Time is an issue.
"The pool of women who already serve on boards are asked quite a bit," Stewart said. "If you're in an active position or have your own company, you can't take on more than one, two at most, outside boards."
She said one directorship can require 50 to 100 hours a year. If a company is in trouble, that can increase substantially.
Some have concerns over possible conflicts of interest – or the appearance of this.
Marlee Myer's, managing partner of law firm Morgan Lewis & Bockius's Pittsburgh office, currently serves on four boards: University of Pittsburgh, UPMC, the Pittsburgh Parks Conservancy. All are nonprofit.
"I don't serve on for-profit boards," Myers said. "My perspective is, If I am serving as counsel to a company, it's better corporate governance. Even though there's not an actual prohibition on outside counsel serving on a board, it can lead to questions in this post Sarbanes-Oxley era. It's better to keep those lines clear."
She has worked with for-profits clients in the board selection process and has been on nominating committees of nonprofit boards.
"I do think there's a lot of interest in diversity, in general, on boards, but I don't think it's wise governance to choose board members based on what gender they are, or nationality or race," Myer's said. "But having a lot of different viewpoints and backgrounds can bring a richness to board deliberation."
Hunter said eh was surprised by Catalyst's figures because he expected the number of women directors to be higher.
"Don't forget, I was brought up in an era of pretty strong discrimination, and 50 years ago when I first joined boards, we wouldn't be talking about this," he said. "We've made enormous progress, but there's such a long way to go."