Catalyst Blog

“If you want to understand the past, look at current conditions,” said PepsiCo CEO Indra Nooyi at last night’s Catalyst Awards Dinner, quoting an old Chinese proverb. “But if you want to understand the future, look at today’s actions.”

All the great speeches and conversations about the Award-winning gender initiatives from Campbell Soup, Deloitte, RBC, and Telstra demonstrated a bright future for women in business. A lot of work remains to be done, but I left The Waldorf last night knowing we were a little closer to gender parity in business leadership.

The day was filled with engaging, inspirational, and sometimes hilarious moments. I appreciated the down-to-earth advice on men championing women from Frank McCloskey, Vice President of Diversity at Georgia Power. “It’s a manager’s obligation to create a work environment where everyone is valued,” he told a standing-room crowd. “I hope y’all change your culture—if not, we’ll take your people,” he jibed.

Later that day, Irene Chang Britt, President of Campbell Soup, North America, discussed her views on work-life. Like me, she does not like to use the word “balance.” She prefers the term: “work-life integration.” After all, she said, “We’re all nuts if we think we’re balanced.”

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It’s finally here!

This Wednesday, March 24, I will gather with thousands of Catalyst supporters, CEOs and other leaders at The Waldorf=Astoria in New York for our annual Catalyst Awards Conference and Dinner. The day will be filled with lively panels on women’s advancement into leadership, plus in-depth presentations by CEOs from Campbell Soup, Deloitte, RBC, and Telstra whose initiatives won the 2010 Catalyst Award. In the evening, we will formally recognize our Award winners’ initiatives and celebrate their success.

This year, close to 80 CEOs from Fortune 1000 companies and leading professional organizations will attend along with a sold-out 1,500 guests for an evening of celebration. If you can’t make it to the Waldorf, join us virtually via our special Awards Conference Twitter feed.  Online or in-person, I want you to be a part of our special day. I look forward to seeing you and sharing in the excitement.

“It is grievous to read the papers in most respects,” wrote Mary Ritter Beard, the renowned early 20^th century author and historian. “More and more I skim the headlines only, for one can be sure what is carried beneath them quite automatically, if one has long been a reader of the press journalism.”

While just skimming print headlines might have been fine in Beard’s day, you can’t always trust them today. I’ve seen bad headlines over the years. But this one from the Harvard Business Review made me gasp: “Adding Female Directors Hurts Norwegian Firms’ Value.”

In the age of Twitter and RSS feeds, headlines that misrepresent a story can inflict more damage than ever. In a matter of seconds, an inaccuracy can spread quickly across the globe. Along the way, it can reinforce negative stereotypes or lay foundations for doubt where none previously existed.

The Harvard Business Review headline above referred to a recent University of Michigan study into the short-term impact of a Norwegian law mandating that 40% of the seats on corporate boards be allotted to women. The headline was featured on HBR’s Daily Stat— a website, Twitter feed, and iPhone app dedicated to delivering “facts and figures to stimulate thought— and action.” Within hours, it was re-tweeted 34 times.

But the sensational headline didn’t tell the whole story.

In 2003, the Norwegian Parliament mandated the 40% quota. At the time, women held roughly 9% of board seats. After voluntary compliance failed, the quota became mandatory on January 1, 2006, and companies had two years to comply. Companies that failed to meet the quota would be forced to dissolve.

The Michigan report first looked at how the initial announcement of the law impacted stock price. Firms with fewer women on board suffered a greater shock. Why? Because they were required to rotate several board members in short order, thereby producing significant uncertainty. Three days after the announcement, the stock price for firms with no women on their boards dropped 5%, while those with women on board did not suffer a statistically significant loss.

The report also looked at market valuation during the first year after the law went into effect. The researchers found that companies with initially fewer women board members suffered more than those with a greater number. According to the researchers, companies were forced to bring on more new women board members very quickly, and in doing so, they selected women who had less management experience than the men they replaced.

The Michigan study focused on the short term, not long-term impact.  Catalyst research shows that over the long term, on average, companies with a higher percentage of women on their corporate board outperform those with fewer. Just as a successful product release can affect share price negatively for a brief moment (think Nintendo’s Wii), so, too, can a controversial new law shortly after its implementation.

But it’s the long-term effect that matters.

That’s why the Harvard Business Review headline was particularly regrettable. In today’s info-soaked society, many people just read a headline, absorb it, and move on. Had I done that, I would have gotten the impression that women make poor board members. Fortunately, I read beyond the headline.

Back in 2005, I received a flurry of interview requests concerning Laura Bush’s selection of Cristeta Comerford as White House executive chef—a first for a woman.

Yes, it’s an achievement, I noted, but I was not surprised she got the job. I was amazed that it had taken more than 200 years for a woman to land this top culinary position!

And what’s worse, the buzz surrounding Comerford’s appointment as head chef eclipsed news about George W. Bush’s plan to replace Sandra Day O’Connor with a male Supreme Court Justice. “Out of the courtroom and into the kitchen,” I thought at the time.

Kathryn Bigelow’s best director Oscar for The Hurt Locker reminded me of the Comerford episode. Bigelow rightfully earned a spot in the annals of female firsts for her gripping film about men at war. (Another irony, perhaps?) But it’s 2010. We shouldn’t be surprised that a woman has actually won the top honor in this category. We should be shocked that it has taken 82 years for it to happen!

Let’s not get distracted by the narrative of female firsts. After all, firsts only go so far.

In 1917, Kate Gleason became the first woman president of a national bank, 50 years later Muriel Siebert became the first woman to own a seat on the New York Stock Exchange, and in 1972 Katherine Graham became the first woman CEO of a Fortune 500 company. These are all important firsts—but women are still nowhere near half of Fortune 500 CEOs, executive officers, or board members in the United States today.

The same is true for women in the film industry. The Center for the Study of Women in Television and Film produces a wealth of information about the so-called celluloid ceiling. Its latest report found that in 2009:

- Women comprised 16% of all directors, executive producers, producers, writers, cinematographers, and editors working on the top 250 domestic grossing films, a decline of 3 percentage points from 2001 and a figure unchanged from 2008.

- Women accounted for 7% of directors, a decrease of 2 percentage points from 2008 and a figure even with the rate in 1987.

This data reminds me that an overemphasis on the importance of “being first” can distract us from what’s really important. In the case of women and work, it can obscure the deep inequities that still exist.

Canadian and American women dominate the ice— but not the boardroom.

Our new Canadian Census reveals that women make up 47% of the labor force in Canada, but only 14% of board directors in FP500 companies. In the United States, the numbers are also low. Women comprise 47% of the U.S. labor force, but occupy just 15% of the board seats. What’s worse, these numbers have remained virtually unchanged the last few years.

You may think board directors are so high in the org-chart stratosphere that they couldn’t possibly affect you or your job path. But they do. That’s why it’s important to look for diversity when deciding where to work.

The boardroom sets the tone for the organization. The more women on a corporate board, the higher the percentage— five years later— of women in senior positions, especially senior line positions.

Companies with more women board directors, on average, financially outperform those with the fewest. In fact, the more women on board, the better the performance. And companies with three or more women on their boards, on average, perform even better! Chances are that these more successful companies afford women greater opportunity for advancement and development.

So when you are looking for a job, first check that annual report. Skip the pretty pictures, and head for the board listing. If it doesn’t include at least one woman— and preferably three or more—your odds of developing a satisfying career and rising to leadership have just taken a serious hit.

Choose an organization that invests in women. Vote with your feet.