WOMEN GET ON BOARD

By Jinnie English

The past, present and future of women on corporate boards.

Despite efforts over the past decades to increase women’s presence on corporate boards, today women represent only 14.7 percent of Fortune 500 company board memberships. But that’s not to say we haven’t come a long way. TCW takes a look back at how far we’ve come in order to determine where we need to go – and how we can get there.

THE PAST

Madeleine Condit, founder of Madeleine Condit & Associates and senior consultant to Korn/Ferry International, has worked with companies to diversify their boards with the best talent for over 20 years. According to Madeleine, traditional male boards became more comfortable with adding women as they began to understand the business value of diversification. In addition, good governance practices required boards to recruit independent directors who would bring business skills relevant to corporate growth and profitability. Generally, the first women to become corporate directors were academics, former government officials, law partners or wives of prominent men. These women were identified through networking or search firms. As women in corporations were promoted into executive and senior management positions, they were sought after for their skills and expertise. There also developed a new pipeline of businesswomen: the successful entrepreneur.

THE PRESENT

With an increased effort to bring women to boards, the benefits have been multifold. According to Sheli Rosenberg, retired CEO, president and vice chairwoman of Equity Group Investments Inc., “Women are responsible for more than 85 percent of all direct consumer spending (more than $3.7 trillion) and influence 95 percent of all goods and services purchased. Women represent approximately 30 percent of the graduates of the top business and law schools.” What’s more, “Catalyst recently did a study and found that boards from the Fortune 500 with the highest percentage of women had equity returns 53 percent higher than those with the fewest women over the four-year span of the study.”

Carol Bernick, executive chairman of the board of Alberto-Culver Company, is a maverick in creating successful and diverse corporate boards. “I’m committed to finding qualified women and people of color for my board,” she says. “However, I will not place anyone on the board that’s unqualified.” When Alberto and Sally Beauty Supply split, the boards needed to be re-populated within six months. After an impressive due diligence, Carol realized that many qualified women and people of color were on at least two boards and unable to take on another, while other candidates were just unqualified. So, she personally searched for qualified board candidates and didn’t return until she found them. She ultimately found a pool of qualified women at the Fortune Women’s Conference.

Deb DeHaas, vice chairman and Midwest regional managing partner for Deloitte LLP, says women directors take their roles seriously. They are constantly seeking resources to become better educated and prepared directors, she notes. Women also utilize board education services such as the Center for Executive Women at Kellogg, the National Association for Corporate Directors, Women on Boards and The Chicago Network to develop, strengthen and increase their network, knowledge and training in preparation for corporate board service. Deb notes that another important training experience, and an increasingly educational resource, are non-profit boards.

While Deb doesn’t serve on any corporate boards due to professional restrictions, she’s heavily involved with non-profit boards and describes the experience as “very rich.” She noted that more non-profit boards, especially the ones she serves on, are being run like corporate boards. The directors who serve on these boards are senior level executives who also serve on corporate boards and their nominating committees. “One of the benefits of serving on a non-profit board with senior level executives is it allows you to work side-by-side with them,” she says. “They can see your skill sets, how you work with others and envision how successful you can be on a corporate board as well.”

THE FUTURE

Because of their business influence, the marketplace and impact on the economy, Madeleine Condit predicts that within the next 10 to 15 years, women will comprise 20 percent of corporate boards. “The caliber of women who will sit on corporate boards will be five-star,” she says. “They will have a proven track record for succeeding in business and this trend is going to be throughout corporate America.”

Linda Johnson Rice, president and CEO of Johnson Publishing Company, Inc., says the placement of directors on corporate boards is “more calculated… and initial contact will often result from a colleague referral.” It’s also important to understand that boards will be looking at potential directors as business partners who bring skills that enable a company to meet their corporate goals. And, to this point, Carol is invested in developing qualified candidates. “The feeder group (pipeline) has to be solid,” she says, “and measurements by which people are equally evaluated must be in place.”

THE NEXT STEPS

Women who are selected as directors come with a wealth of personal and professional experience. Carol Bernick is adamant that anyone interested in serving on a corporate board must be qualified. “You have to run something,” she explains. “In the boardroom, people have to trust each other and share their stories so they can talk with the same level of professionalism and experience.” Building your resume to prove your skills is essential. “The best way to do this is to have profit and loss responsibility of a floundering division,” Carol says. “Take on that challenge, turn it around and gain experience with operating line management.”

Women have made great strides women in earning corporate board positions, but we haven’t come far enough. By building job skills, networking wisely and gaining experience on non-profit boards, the next generation of women board members will be able to continue the trend of an increased woman presence.

A WORD TO THE WISE

Know why you want to sit on a board. “Go through the education programs to see if you’re ready to take on the responsibility and determine what you can bring to a board,” Madeleine Condit suggests. “Sitting on a board is time-consuming and people think it’s a status symbol, but it’s not designed to be a status symbol.” Linda Johnson Rice says the most important thing “is one’s level of commitment to the mission and goals of the organization.”

Use corporate board resources effectively. “Sure, board programs can prepare you, but you want people who have experience in the boardroom,” Carol Bernick says. Programs such as the Executive Center for Women at Kellogg can provide education, while non-profit boards can help you gain boardroom experience.

Do you have the time or permission to serve on a corporate board? “The biggest misconception of board service is that it’s an easy job requiring very little time commitment,” Sheli Rosenberg says. Also check if your employer has any restrictions to employees serving on a corporate board.

Manage your relationships well. “Most board openings are first discussed within the board members’ inner circles,” Sheila Ronning, of Women on Boards, says. “To be connected and networked to the right people is crucial. Maintaining those relationships is essential.”

RESOURCES and EVENTS

Catalyst www.catalyst.org
Center for Executive Women at Kellogg http://www.kellogg.northwestern.edu/research/cew/index.htm
The Chicago Network www.thechicagonetwork.org
The Directors’ Council www.directorscouncil.com
National Association for Corporate Directors www.nacdonline.org
Women on Boards www.womenonboards.com
Women on Boards Panel The annual panel will be held March 9, 2009. Participants include Sheli Rosenberg, Sheila Penrose and Victoria Medvec. http://sharpupswing.com/Chicago4529.php