Do you hear what I hear? “When women thrive, businesses thrive.” As reported by Grant Thornton, there is a significant opportunity cost associated with male-only boards: $655B for 1,050 companies across India, the UK and US. The same “group thinking” is opening a doorway to embrace diversity of thought to achieve business growth. Boards of the future are diverse and inclusive of women, outperforming those with the least women with higher Returns on Equity (ROE), Returns on Sales and Returns on Invested Capital.
A year ago I published an article titled “A Place at the (Board) Table… for Women.” In it, I noted that chapters of 2020 Women on Boards (WOB) would be meeting to “encourage the adoption of a 20% goal for corporate boards by 2020.” And one year later, the “National Conversation on Board Diversity” took place on the same evening in 17 cities across the U.S.
I found myself hosting a table at the San Francisco event, WOB’s first in San Francisco, surrounded by executives and board members from companies that have achieved 20% or greater gender diversity within their boards and local executives who are passionate about the importance of gender diversity on boards and in leadership roles. There was an incredible diversity buzz emanating from the crowd of women and men.
What a difference a year makes! (Or does it?)
WOB is on track to reach – and exceed – its goal of seeing 20% or greater US company board seats held by women in the Fortune 1000 by 2020. According to the WOB Gender Diversity Index (GDI)*, depicted below, of the 842 active companies, women hold 18.8% of board seats, an increase of 1.1% from 17.7% in 2014. (14.6% of board seats were held by women in 2011.)
Larger companies, such as the Fortune 100, show even more progress. “During the past year, 147 GDI companies added at least one woman. Despite these gains, 138 companies increased the size of their board by adding one or more male directors, and no women.”
In California, the total of women on boards for 76 Fortune 1000 companies is 19.4%, close to achieving the 20% threshold, while the percentage for the Top 400 companies by Market Cap in California and specifically in the Bay Area is under 15%.
In essence California needs 292 women for these companies to reach 20%. There is no reason not to achieve this goal soon.
In “A Place at the (Board) Table… for Women,” I said: “It’s time to fully address how to optimize the composition of our boards and, in that process, solve the gap by ensuring they capitalize on all available talents, objectively including women.”
This message was resounding loudly and clearly among the panelists at this important event. James H. Quigley, an independent director of Wells Fargo’s board, said: “Let’s build the board of the future. Governance and Nominating committees need to take an aggressive approach to the board of the future non-gender specific.”
This, in my opinion, is key. I strongly believe that the priority should be on appointing directors who are best qualified for the needs of the board based on the contributions that are most needed. I believe equally as strongly that it’s possible to honor this priority while also consciously recruiting a diverse selection of directors with different ages, races, genders and backgrounds.
The great boards of the future are intrinsically focused on the trilogy of addressing, board evaluation/leadership effectiveness for optimizing board composition and succession planning for the Pivotal Leadership TrioTM (PLT – Board, CEO and Executive Team). With these governance priorities, they must have a heterogeneous board make-up and selected directors must understand talent strategy, market strategy, cyber security and social and environmental risks, and many women are more than qualified to improve the decision making and thinking within the board, the CEO and the executive team.
Today’s business environment dictates having diversity within our boards. And indeed gender balance often produces a better outcome and positively impacts businesses: “social consciousness, improved performance, longer term perspective, improved decision making, connection to customer base,” and more.
According to the WOB gender diversity index using the Fortune 1000 list, the number of winning companies “W” (at 20% greater women directors) has increased since the tracking began in 2011, and the number of Zero “Z” (those with no women on their boards) has declined. “ While every sector has seen growth in the numbers of women placed on boards, gender diversity must remain top of mind for all of our boards.
Research from Grant Thornton, Credit Suisse, Thomson Reuters and others all corroborate that our economy is strengthened by increasing the presence of women where they belong. Donna Hamlin made this point colorfully in The Science of Why Gender Matters in the Boardroom, saying: “Women have 225 emotions and men have 14…Women have a deeper range of vocabulary for experiences. Men find themselves saying ‘Huh? What is she talking about?’, while women ask: ‘why don’t they understand me?’ ”.
The panelists at the WOB event addressed Why & How do Winning Companies Recruit to Maximize Board Effectiveness. I agreed strongly with their points that:
- Boards need women.
- Women need to network, network and network to get on boards.
- Companies need to refresh their board composition, take a strategic approach and take accountability for diversifying their boards.
While the top Fortune 100 companies have the highest percentage of boards with gender diversity, more women are very much needed in smaller and newer companies.
The WOB event began by recognizing the top Bay Area winning companies (20% or greater) and the companies that have had 20% women on their boards for 5 years.
I was delighted to host Williams-Sonoma, for whom David King accepted the Honor Roll, and to accept the Honor Roll on behalf of Medivation and Levi-Strauss. David told me afterwards: “Williams-Sonoma, Inc. was proud to be recognized as one of the top 5 companies in the Bay Area for Board gender diversity, at 44%. Diversity and inclusion are among our company’s deepest-held values, and our diversity extends to every level of our company, with females representing approximately 70 percent of our company’s overall population.”
I had the pleasure of having as my guests at my table:
- Aimee Brown, Board Treasurer, Chair of Finance Committee and Executive Committee for org (Formerly The Bay Institute and the Aquarium of the Bay Foundation).
- Jennifer Cabalquinto, CFO of Golden State Warriors.
- Keith Carlson, my husband, builder and developer, a loyal supporter of board diversity and of my active involvement as advocate for diversity.
- Liz Fetter, Board of Directors of Alliant International University Inc., Board of Directors of NACD, Northern CA.
- Kris Halvorsen, Chief Innovation Officer for Intuit, Board Director for Autodesk ranked in the top 20 companies in the San Francisco Bay Area with 30% gender diversity within its board. Kris accepted the Honor Roll on behalf of Autodesk having achieved 20%+ diversity for over 5 years.
- David King, Senior Vice President General Counsel, Williams-Sonoma, Inc (WSI) accepting the Honor Roll on behalf of Williams Sonoma Inc the #2 company in the San Francisco Bay Area with 44% diversity within its board. WSI’s CEO is Laura Alber.
- Kate Purmal, Co-founder of CoPilot Systems.
- Meg Withgott, CTO of Panafold.
Dani Dudeck, Chief Communications Officer for Zynga was unable to join us last minute, but was keen to represent Zynga’s board with 25% gender diversity. Kelly McGinnis, Global Chief Communications Officer at Levi Strauss & Co, was also unable to join me at our table for accepting the Honor Roll on behalf of Levi, ranked #5 in the San Francisco Bay Area with 40% gender diversity.
The event was a success. Networking was vibrant. It was invigorating for so many women and men to connect with peers and friends who are all passionate about gender diversity within boards. I enjoyed reconnecting with colleagues, and I am grateful that my wonderful guests could join me and our great group of attendees. Here are some comments from my table-mates:
It was a thought-provoking evening. Thank you for including me. My only critique of the discussion can be summarized in the phrase ‘correlation does not imply causation.’ It’s probably too early, too complex, to assign credit to balanced boards. Yet the evidence is mounting, and it’s fascinating that change is starting from the top. Gloria Steinem once said, ‘Women have always been an equal part of the past. We just haven’t been a part of history.’ But it’s striking: The biggest, most successful companies are writing women into the company history. The Fortune 100’s have the highest percentages of women serving on their corporate boards.
-Meg Withgott, CTO Penafold
One important test for a board is how well it functions in a time of crisis when the course of action isn’t obvious. Diversity helps you go broad and not overlook approaches that make convergence and cohesive action possible.
-Kris Halvorsen, Autodesk Board
Very informative and educational. Excellent questions by the moderator Alison Davis. 2020 is a start and given that women make-up 52% of the workforce, they need to be equally represented in the boardrooms. Women must be given the opportunities to be promoted in the positions from which they can be recruited to be on boards.
-Keith Carlson, my husband
Being in the Bay Area, the epicenter of technology, we know that great ideas come from the disruption of the status quo. C-Suites and Corporate Boards need to move away from the status quo and start to reflect the diversity of their employees, clients & customers. A variety of backgrounds can make Corporate senior executives and Boards more adaptable to today’s ever changing business environment. Healthy debate, constructive conflict…creative tension all help to bring forth the best ideas. As a woman of color, I believe C-Suite and Board diversity is the right thing to do, but more importantly – as a CFO – I KNOW it’s the right thing to do for business. The numbers reflect that a diverse corporate management team and a diverse board can lead to greater business success.
-Jennifer Cabalquinto, CFO Golden State Warriors
It was exciting to know that the energy of 2020WOB in SF this evening was also being played out in many cities across the country. Hopefully this means the tipping point has been reached where just 1 is no longer acceptable. From the turnout, we know the women are ready, willing and well-qualified to serve. It is up to the men who we saw in person and on video to pass on to their networks, where recruiting really occurs, that the statistics show their company will become better managed and with greater profitably with more diversity of opinion in the boardroom.
The boards also need to not pigeon hole the women the same way men do. Instead of utilizing only CEOs, women with responsibilities just below the C-suite can contribute significantly to boards where other members lack experience in her area of expertise. Conversely, women who have been CEOs even at a smaller company can provide the insight needed to challenge group think and overcome stasis, leading to greater profitably.
So, where are we a year after I first took a focused stand for women’s place on boards? After this event, I think we are making progress, but the heat is on for women to be in the seats where they belong. I concur with my husband: while there is a pipeline of talented women, there needs to be more and we need to know who they are and how they can best impact within boards. As we all aspire for a thriving economy and sustainable growing organizations, we are dependent on achieving a true balance of talents inclusive of diversity.
As we approach 2016 and boards reflect about achieving higher corporate output, higher valuations, higher growth, diverse thinking and decisions and true social consciousness, I say strive to diversify your board through and through and invite skilled women to be where they belong. They belong at the board table.
I thank 2020 Women’s on Boards co-founders Malli Gero and Stephanie Sonnabend for their relentless efforts to track and create a comprehensive Gender Diversity Index (GDI) and for WOB’s mission. I thank the San Francisco (SF) Chair Nancy Shepard for leading the planning and execution with our SF Host committee. Together we are grateful for the contributions of our presenter Donna Hamlin, moderator Alison Davis and panelists (Helen Bulwik, Robin Greenway MacGillivray, Joe Griesedieck, James H. Quigley], our Gold sponsors Deloitte and pagerduty [with Andreessen Horowitz & Bessemer Venture Partners] and Bronze sponsors Carrie Schwab-Pomerantz, Evercore Wealth Management, First Foundation Advisors, Presidio Bank and INTRABOND CAPITAL, our In-kind sponsor the Hilton San Francisco Financial District. Thank you to our supporting organizations Bay Area Women Leaders Network, National Association of Women Business Owners (San Francisco Bay Area), Stanford Women on Boards, Women Corporate Directors (Northern California Chapter).
In closing, I would like to invite people to click here to download my complimentary eBook about board composition, which includes all of my blogs about board diversity. I invite you to share this blog to increase awareness about a transformation that must continue to ripple.
*Images and statistics taken from the WOB Gender Diversity Index and its derivative PPT presentation given by Nancy Shepard, the Chair of the Host Committee in SF, at the WOB event I attended.