Get On Board: Let's Move to Gender Parity on Boards, In C-Suites
Gender parity is a goal as women as CEOS and board members of public companies is still far too rare.
Keep on chugging along. Progress to gender parity at the very top is a mixed bag of good and not so good news.
As the appointment of women to the C-suite is so rare, it makes big news. And this is not necessarily good news, say researchers from Northwestern University’s Kellogg School of Management.
Apparently women need to be quiet about it. Or the stock goes down.
In a study of nearly 8,200 CEO appointments between 2000 and 2014 at more than 2,500 publicly traded companies, only 1 percent of those suite spots went to women. But those appointments got three times the media buzz, according to a database of more than 17,000 media outlets. And this caused an average discount of 2. 5 percent of stock value immediately following the announcement, reports the Chicago Tribune.
“By contrast, female CEO appointments that received minimal coverage led to positive market returns averaging about 2 percent—suggesting investors liked women in the top role, as long as it didn’t generate too much buzz,” writes Alexia Elejalde-Ruiz.
“Among the 84 women whose hirings were examined in the study was Meg Whitman, CEO of Hewlett Packard, who got mentions in 189 media outlets the day her appointment was announced and experienced a negative market response.”
The author continues, NU study co-author Ned Smith said, “the penalty to a company is short term and the stock rebounds within about 20 days. But the immediate market reaction can have a long-term impact on the CEO herself, as research shows company boards more heavily scrutinize CEOs whose appointments cause a negative market response.”
So how do we reverse this trend?
Perhaps as a culture we need to move more aggressively to gender parity so the news of a female CEO is neither rare nor scary. That it becomes so commonplace that it is seen as good thing.
Take The Lead’s mission is to reach parity in leadership by women by 2025 across all fields.
Hoping to reach gender parity as well, a new app is creatively charting the progress of international companies and their female representation on boards. The newly launched LedBetter site charts thousands of entities in industries from apparel to transportation. You click on a major leader in an industry– for instance energy– and discover where the company ranks for female board representation. Major brands such as Shell and Valeo are included.
In the food and beverage industry, for example, The Prada Group, with the Marchesi brand, ranks 6th out of 231, while Archer Farms from Target ranks 9th out of the same number.
Salvador Rodriguez writes about this innovative gender diversity web app in Inc.: “’People don’t have any easy way to see this information, and on top of that, sometimes the results are surprising. You have men leading companies that make products almost exclusively for women,’ said Iris Kuo, co-founder of LedBetter, which is a research group that is primarily volunteer-run. ‘So we thought ‘Why not make that obvious for people?'”
Kuo tells Inc.: “I hope that people take away a better understanding specifically of the products that they use in their everyday lives and what the female representation is at the companies that make those products.”
Keeping tabs on progress is important. Perhaps equally critical is to continue to push towards progress.
It’s critical to acknowledge that as the first female candidate of a major party in this country makes history, that we need to make more progress on the number of female CEOs in this country.
Harriet Minter writes in The Guardian: ”The number of female senators in the US stands at 20 percent. Just 4.2 percent of Fortune 500 companies have female CEOs. That sound you heard wasn’t glass breaking it was just the creak of a small crack slowly spreading. We already know that achieving gender pay parity is going to take another 70 years, so what can we do to speed the process up? For me, it starts with with supporting and elevating female entrepreneurs, because when women run their own companies they can make their own rules.”
According to Minter: “’Women in leadership roles [whether that’s business, government or third sector] must take action in support of other women,’ says Uschi Schreiber, global vice chair – markets at EY. ‘“As we see more female CEOs, let’s make sure they remember that they have a responsibility to create an environment that is supportive for other women too.’”
A new study by Catalyst shows just how much needs to change to have more female CEOS and to reach parity, as only 1 out of 5 board positions goes to women, and far fewer CEO spots go to female leaders.
Kimiya Manoochehri writes in USA Today: “Men land four of every five board seats, finds the survey by Catalyst, which specializes in finding ways to promote women within organizations. It’s even worse when it comes to female CEOs. They hold only 4.2 percent of the elite top jobs.”
“Men continue to be over-represented, holding more than their fair share of board seats and, in some cases, all the board seats,” says Deborah Gillis, CEO of Catalyst, in a statement.
To get more women into the C-Suite we have to identify the barriers standing in their way.
Including more women and minorities in business incubators and accelerators may be a way to fuel the pipeline of more women at the top. A new study from JP Morgan Chase outlines barriers and strategies for women and minorities in those types of companies.
“Our research suggests that various factors are preventing more women and minority entrepreneurs from participating in high-tech incubators and accelerators. We group them into four types of challenges: recruitment, selection biases, program design, and culture. Recruitment and selection biases may prevent diverse entrepreneurs from gaining access to high-tech incubators and accelerators, while program design and culture may not make them want to,” according to the report.
Some good news is that publicly traded companies in Pittsburgh are actively seeking paths to gender parity at the board level. Pittsburgh public companies have nearly 17 percent women on corporate boards, far higher than the national average.
Joyce Gannon writes in the Pittsburgh Post-Gazette: “A couple of programs under way in Pittsburgh have begun trying to groom women for serving on corporate boards including a Board Ready Women Initiative sponsored by Deloitte LLP and an annual event held here last November as part of the national initiative 2020 Women on Boards.”
“It’s time for women on boards to be the norm instead of being rare news”
Why is it such slow going regionally and nationally to move to gender parity on corporate boards at public companies? There are many reasons, Gannon writes.
“Among them: women hold relatively few top executive jobs that would make them highly visible candidates; women lack mentors and sponsors to expose them to the right networks; women often take on more family responsibilities than men which may limit their availability; and many smaller public companies don’t feel pressure to change.”
She adds, “An April survey of 4,000 male and female directors worldwide by the WomenCorporateDirectors Foundation found that male directors believe there is a lack of qualified female candidates, while women believe diversity is not a priority in board recruiting. In the same survey, 49 percent of female directors supported diversity quotas for boards compared with 9 percent of male directors.”
It is time for both men and women to let women get on board. And to make it the norm so that it is not considered a rare piece of news.
About the Author
Michele Weldon is editorial director of Take The Lead, an award-winning author, journalist, emerita faculty in journalism at Northwestern University and a senior leader with The OpEd Project. @micheleweldon www.micheleweldon.com