Women in positions of power have a lot less trouble than men at finding other female executives for key roles, an analysis of 1,000 U.S. corporate boardrooms found.
When women hold key leadership posts such as chief executive officer or board chairman, companies have women in more than 27 per cent of director seats, compared with less than 18 per cent when men are in charge, a study released June 6 by the advocacy group 2020 Women on Boards shows. The group wants women to hold at least 20 per cent of all board seats at U.S. companies by 2020, up from 17.9 per cent now. Almost 90 per cent of businesses led by women already meet that goal.
“Women-led companies are doing better in the gender diversity on boards than male-led companies, but in general we’re also seeing a better level of women serving on boards,” said Malli Gero, co-founder and president of 2020 Women on Boards. “When you have a woman on the board, they are going to be able to help find more women.”
Companies are under increasing pressure to create more diverse boardrooms, particularly by adding women, to reflect the makeup of the workforce. There’s also mounting evidence that it’s good for profits. Last month, Morgan Stanley said companies with more women in the ranks had better returns and lower volatility. Women make up almost half of the total workforce and about 4.4 per cent of CEO jobs in the Standard & Poor’s 500 Index.
Last week, pension funds with more than US$1 trillion in assets under management issued an open letter urging companies to increase the number of women, minorities, and lesbian, gay, bisexual and transgender people on their boards. The letter, signed by treasurers from 14 cities and states, including California, Massachusetts and New York, pointed out that men hold 80 per cent of the board seats at companies in the S&P 500. The letter noted only 32 per cent of male directors considered gender diversity to be very important, citing consulting group PwC’s annual survey of directors.
The Women on Boards study showed that about three quarters of female directors were serving on only one board, a finding Gero said belies the myth that there is only a small group of qualified women who must be shared among several companies.
“There are very few companies that hold the position ‘no women, no way”
The WomenCorporateDirectors Foundation this year asked more than 4,000 board members why the panels are so male-dominated, and 30 per cent of men cited a “lack of qualified female candidates,” something with which only 7 per cent of female respondents concurred.
It’s the bigger companies that are increasingly willing to hire female directors. Among the more than 1,800 businesses monitored by the group, 334 still have no women in those roles, and that group is dominated by smaller companies, Gero said.
Still, the advocacy group said it sees signs of progress. It runs a campaign about once a month to target a company without female directors, but it’s getting harder to find a scapegoat that would be recognized by the general public, Gero said.
“There are very few companies that hold the position ‘no women, no way,’ ” she said. “It’s more that they really, honestly say that they don’t know where to find them, or they just don’t want to take the time, or the search is too expensive.”
By Jeff Green
Source: Bloomberg News
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