December 11, 2012 by Brande Stellings, JD
Around the world, everyone is talking about women on corporate boards, but the talk hasn’t led to change in the United States. For the seventh year in a row, Catalyst prepared the same headline for the release of our annual Catalyst Census: Fortune 500 Women Board Directors: women’s representation on F500 boards is stalled.
The good news for 2012 is that women’s representation is at an all-time high. The bad news is that the all-time high is 16.6% and that lackluster number is enough to rank the United States fourth best in the world for representation of women on boards.
Just imagine: if there were a Board Olympics, the United States would be within spitting distance of a bronze medal for its 16.6% representation, even though women represent almost half of the U.S. workforce, more than half of all managers and professionals, and more than half of all college and master’s degrees awarded in the country. That hardly seems award-worthy.
Some would say this is a high-class problem. We’re talking about a total of about 5,500 board seats for all of the Fortune 500. What difference would filling those seats with 2,250 women rather than the current 900 make? Board diversity is only one piece of the puzzle of gender equality we will tackle on Catalyzing, but it’s a critical one. Corporate boards wield immense influence and power, setting the course for some of the most important economic and social institutions in the world.
Apart from arguments of equity, we can give you three solid business reasons for increasing women’s representation on boards based on Catalyst research. First, companies with more women on their boards, on average, financially outperform those with fewer women–and not by just a little. Second, companies with more women board directors were more likely, five years later, to have more women in the senior management ranks, especially in line positions. And companies with the highest representation of women on their top management teams, on average, reported better financial performance. Third, companies with more women leaders, on average, are linked with higher quality corporate social responsibility initiatives and philanthropy. Make the world better while adding to the bottom line–who wouldn’t want those results?
Nevertheless, we still see no progress in women joining corporate boards. Let’s talk about what is not holding women back.
It’s not lack of CEO experience. Almost half of F500 board seats in 2011 are occupied by directors without CEO experience. And it’s not that there’s a supply problem with respect to board-ready women. If you look at only one potential source of directors—active executive officers of F500 companies—there are over 700 women officers, enough to fill every board seat that comes available in the next year (with women to spare).
After years of identifying the challenge, Catalyst is now offering a solution to help move the needle. Catalyst has launched the Catalyst Corporate Board Resource , connecting CEO-endorsed women to board opportunities. How does it work? CEOs of Catalyst member companies sponsor women executives who are ready for board service by adding them to a directory maintained by Catalyst.
Catalyst member CEOs and their networks can access this uniquely curated directory as a first resource when directorships become available. By working with Catalyst’s Corporate Board Resource—and with the weight of their personal recommendation behind these women candidates—member company CEOs can directly increase gender representation within their own boardrooms and at others, while providing extraordinary leadership opportunities for their top women executives.
Progress is closer than we think. The leading companies of the United States, the Fortune 100, could jump to 25% representation in one year by adding just one woman to their boards. We have the women. We have the business case. But, do we have the will to make it happen?
Check back in December 2013 when we report on next year’s Catalyst Census: Fortune 500 Women Board Directors to see if the headline has changed.