A small but growing number of U.S. companies have intensified their push to increase the ranks of women on their boards as businesses pay greater attention to gender parity at all levels.
These initiatives are bearing fruit as companies revamp the way they recruit female directors. Some companies have begun to restrict initial searches to women, while others insist on interviewing at least one woman for director spots. Among those pursuing such strategies are Ecolab Inc., Symantec Corp., Johnson & Johnson, Voya Financial Inc., Pinterest Inc. and Nucor Corp.
At Ecolab, the cleaning-products company had just one female director when Doug Baker advanced to become its chief executive in 2004. Its current 15-member board includes four women—partly due to his work with Beth Stewart, a recruiter who specializes in seeking qualified female directors. Her reliance on women-only slates brought “very good candidates,” Mr. Baker said.
The Ecolab CEO approached Ms. Stewart when he and its lead independent director were looking to replace four male colleagues due to retire in 2016 and 2017. Directors believed increased board diversity “sets the example for the company as a whole,” recalled Mr. Baker, who would like women to account for 50% of its corporate leadership positions—up from about 20% today.
Ms. Stewart, a former director of three public companies, began as a Goldman Sachs analyst. Trewstar Corporate Board Services, which she formed in 2012, has recruited 30 women for U.S. public-company boards.
She thinks boards will gain more gender diversity if they “interview all women slates before interviewing men.’’ Using this approach, Ms. Stewart helped Ecolab find two women directors since 2014.
These extra efforts have yet to alter the sluggish progress on board gender diversity, however. Women held less than one-fifth of directorships at S&P companies last year, a slight gain from the prior year, according to Catalyst, a research group. A 2011 Catalyst study found significantly better financial results at big businesses with three or more female directors than those with none.
“The system produces white male candidates unless board leaders deliberately do something different,” said Karen Horn, chairman of the National Association of Corporate Directors.
But “people are beginning to figure out how recruiting more women to boards is done,” added Ms. Horn, who has served on nine public-company boards.
Under Ms. Stewart’s guidance, Symantec Corp. directors limited their 2013 hunt solely to women because the maker of antivirus software “takes its diversity commitment seriously,” said David Mahoney, head of the board’s nominating and governance committee. The board then had one female member.
In an unusual move, Symantec didn’t insist that possible directors already had served on a public company board. The common requirement is one reason that boards have appointed so few female directors, Mr. Mahoney said.
But companies don’t always demand the same qualification for male directors. “Boards dominated by men have grown used to the male standard of congeniality and so accept a man who’s never been a director before,” even though they usually reject women without such experience, said Eleanor Bloxham, a governance consultant.
Retired Air Force Gen. Suzanne M. Vautrinot and Anita M. Sands, a former wealth-management executive for Swiss lender UBS Group AG, joined Symantec’s board in October 2013. Neither had been corporate directors before. As board novices, they set “a high standard for commitment to the more routine responsibilities of public directors,’’ Mr. Mahoney said. Both now hold three seats apiece.
When Johnson & Johnson inaugurated an all-women search early last year, the board wanted its next member to be a public-company chief, according to people familiar with the matter. The health-products giant changed course after realizing most women commanding major corporations lack time for another directorship.
J&J directors instead chose Mary C. Beckerle, head of Huntsman Cancer Institute at University of Utah, as their third female colleague. J&J declined to comment.
Other businesses try a version of the Rooney Rule, which requires that at least one woman or underrepresented minority be interviewed for positions. The National Football League created the rule to ensure that teams interviewed minority candidates for head-coaching and general-manager jobs.
Voya Financial informally took this approach after the provider of retirement, life insurance and investment services went public in spring 2013 with a nine-man board. CEO Rodney O. Martin Jr. and another director soon interviewed male and female prospects.
Women landed four of the five board seats filled since Voya’s initial public offering. Mr. Martin hopes women will hold half of its 10 board seats someday. “Our board should look a lot like our customer base,” he explained. “More women than men control family financial decisions.’’
Pinterest began applying the Rooney Rule to fill full-time leadership roles and directorships in July 2015, a spokeswoman said. The image-discovery site made popular by woman appointed its first female director this May.
“The clamor for gender board diversity in the tech industry reached a fever pitch during the past two years,’’ said Sukhinder Singh Cassidy, founder of Boardlist, a marketplace for female board talent in tech. Boardlist has amassed the names of more than 1,200 women recommended by tech business leaders and venture capitalists as ready for directorships.
Three endorsed women already have won board seats with Boardlist’s help.
By Joann S. Lublin
Source: Wall Street Journal
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