As the year winds down there’s some reason for optimism about the rise of women in top corporate positions and holding board seats. In their 10th annual study, UC Davis researchers found women hold 11.5% of the board director and highest paid executive positions at the 400 largest public companies (measured by market cap) headquartered in California.
That’s the good news, as it’s a .6% increase over the previous year surveyed. If the trend continues, women will hold almost 20% of California director positions by 2020, according to the California Women Business Leaders study.
The bad news: One-quarter of those companies (101) have no women in top positions at all. This includes companies like Tesla, Tivo, Open Table, Monster and Skechers. And out of 400 CEOs, only 14 are women.
These mixed results were made plain at a recent unveiling event for the California Women Business Leaders study, sponsored by Watermark, UC Davis and San Francisco State’s College of Business. At the outset of the meeting, which I was fortunate enough to attend, UC Davis School of Management Dean Ann Stevens quipped it was a rare event where 100% of the business school deans in attendance were female (she and San Francisco State’s Dean Linda Oubré).
The study’s findings paint a complex portrait of women-in-the-workplace. Annie’s Inc. and Williams-Sonoma were by far the most gender-balanced companies, with both their leadership teams consisting of 50% women. Other top companies include Wells Fargo, HP and Yahoo! And the financial results speak for themselves — the top 25 companies by percentage of women leaders generated twice the revenue and net income of the other companies included in the study. Of those 25 companies, 36% have a female CEO.
Interestingly, when women are on corporate boards, they tend not to be in the most powerful positions on the board — that of board chair or nominating committee. Only 2.3% of board chairs are women.
When it comes to compensation, contrary to what some assume, the pay gap is not due to women making less in the same positions as men. It is more of an issue of women holding fewer of the very top positions (such as CEO) and more of the lower executive positions (SVP, VP, etc.).
Industry seemed to have a negligible effect. While utilities and consumer goods industries have the greatest number of women directors and healthcare and pharmaceuticals has the greatest number of women highest-paid executives, the differences are small. The semiconductor segment was the only significant outlier, with just 6.1% women directors and 5.6% women highest-paid executives.
Bay Area companies did better than firms in other locations, with 13.1% women directors and 10.8% female highest-paid executives. Southern California companies have 11.5% and 8.4% respectively.
So, what can be done to improve these numbers and achieve greater parity on boards and in the executive ranks?
- Identify, nominate and train women to serve on corporate boards. After reviewing the study, we had a brief discussion around women serving on corporate boards. Like many women, serving on a corporate board has never been something I seriously considered and research shows I am not alone. Similar to running for political office (which research also shows women are less likely to be encouraged to pursue), a big part of the problem is that it doesn’t occur to many women to go after board seats.
And sadly, in all arenas, women are more likely to discount their skills, abilities and experiences and assume they’re not qualified (not an issue for most men). While some boards use executive search firms to assist with filling their board seats, most positions are still filled with someone either known to one of the board members or referred to a current board member by someone they know. That means more women need to be introduced to and networked in those circles.
- Legislation? There was some debate at the meeting as to whether legislation is a useful tool in this arena. California is the only state to have pursued any legislative action related to women on corporate boards and even then, it is a non-binding resolution. The resolution (SCR-62) “recommends” every publicly-held corporation in California with 9 or more director seats have a minimum of three women on its board, every publicly-held corporation in California with five to eight director seats have a minimum of two women on its board, and every publicly held corporation in California with fewer than five director seats have a minimum of one woman on its board.
The good news is 64 companies have met the standards set by the resolution (timeline was January, 2014 — December, 2016). One third of those companies are in the hardware and software industries. So, perhaps even non-binding resolutions are helpful in terms of keeping the issue on the radar screen.
- Keep finding ways to support women in the workplace, so they continue to move up the corporate ladder to the very top positions in the C-suite. Everything from mentoring, training and internal / external professional business women’s networks to flexible work and family-friendly policies and services.
- Activism. A representative from Change.org noted that around 100 signatures on a petition are all it takes to get corporations to take notice of a trending issue and take some action. (You can access their petition on this issue here: womenonboardsnow)
While I trust most companies actually want better parity within their boards and executive teams (after all, it makes great business sense), the issue gets lost amongst competing priorities. Continuing to highlight the issue may help parity stay on the list of corporate objectives.
In the end, greater diversity on corporate boards is just good business. As diversity increases, so will the profits. Any who doesn’t like that?
Sonya Zilka is a writer, mother, activist and Human Resources executive based In San Francisco. She consults with organizations on workplace issues, encouraging more innovative ways of working that better integrate work into daily life.