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Friday, October 8, 2010

Trends change slowly in gender makeup of boards

No one has a greater vested interest in seeing more women being named to boards of directors than the Forum of Executive Women.

A decade ago, the Fort Washington nonprofit organization issued its first report on the gender makeup of area corporate boards and launched what it said would be an all-out push to persuade companies to add qualified women as directors.

In that inaugural report, women held 10.2 percent of the board seats of 111 companies.

Care to guess the percentage included in its latest report, scheduled to be released at its annual leadership breakfast Friday morning?

Eleven percent.

Thank goodness for the power of rounding, because I calculated the percentage of 90 female board seats to 844 total board seats at the 100 largest public companies based here as 10.7 percent. (Data for the report come from filings with the Securities and Exchange Commission.)

The times may be a-changing, but corporate boards seem to be humming a different tune.

Looking at year-over-year changes, Forum president Ellen Toplin said she was disappointed in the “slow, incremental changes at the top.”

Philadelphia continues to lag the national trend that Catalyst Inc. has reported on each year since 1993. According to that nonprofit, which advocates on behalf of women in the workplace, women held 15.2 percent of the board seats of Fortune 500 companies in 2009, the same as in 2008.

Of those 100 public companies based in our region, 43 have no women on their boards. Only eight had three female board members, a number that would indicate a significant level of diversity: Campbell Soup Co., Charming Shoppes Inc., Cigna Corp., Destination Maternity Corp., Harleysville National Corp., Sunoco Inc., Sunoco Logistics Partners and Willow Financial Bancorp Inc.

That list will get a little smaller next year. Willow Financial was acquired by Harleysville National, which itself was bought by Buffalo, N.Y.-based First Niagara Financial Group Inc.

If there’s a trend that Toplin does take to heart, it’s the percentage of women in senior executive roles at those same 100 companies. In 2009, women held 71 of the top 645 executive positions.

Yes, that’s also 11 percent. But five years ago, there were only 62 women among the 720 total executives, or 8.6 percent. That means women made gains during a period when the overall executive ranks of those companies were shrinking.

Counting heads can only tell you so much. Over the last decade, the United States has experienced two recessions and responded to various corporate scandals by enacting new rules over director independence. So certainly there have been new pressures on the clubby boardroom.

By one measure, the nominating committees of boards have changed their behavior. The trade publication Directors & Boards, which also tracks director placements, found that 39 percent of the board recruits in 2009 were women - a big jump from 25 percent in 2008 and 2007 and triple the percentage from 1994, the first year it collected data.

And Toplin said the Forum, which has more than 350 women executives as members, is getting more inquiries from nominating committees seeking qualified board recruits now than a decade ago. “We are established as an organization that is sparking a dialogue,” said Toplin, who is also president of the StarToplin public relations agency.

Tara Weiner, managing partner of the Greater Philadelphia Region for Deloitte L.L.P., told me the lousy economy of the last two years may be dominating the focus of boards, but diversity remains a “business imperative.”

“Businesses know that there is real value in soliciting many and diverse perspectives in governance and leadership decision-making, and one way to achieve that is by encouraging gender diversity in the C-suite and at the boardroom table,” she said.

As the Forum’s numbers indicate, however, there’s plenty of room for more companies to get on board with that.
Posted by Mike Armstrong @ 9:15 AM  Permalink | File Under: Corporate Governance | Post a comment
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About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
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