Haddonfield, NJ -- (ArriveNet - Sep 28, 2007) -- The Forum
of Executive Women, the region’s premier organization of
influential women leaders in business, today released the
research results from its 7th annual Women on Boards survey, a
look at how the boards at the 100 largest publicly held
companies in the Philadelphia region reflect gender diversity.
Although this year’s research shows slow progress in several
areas, it will take more than 70 years at the current rate to
reach parity in local boardrooms. And Philadelphia companies
continue to trail the national average for the number of women
leaders in business .
The research, conducted by The Forum of Executive Women’s
Executive Suites committee in concert with professional services
firm Deloitte & Touche USA LLP, entitled “Women on Boards 2007:
The Time Has Come,” is based on 2006 data reported by the
region’s 100 largest public companies. Here are key findings:
• The number of female board members here increased less than 1
percent over the previous research year – from 9.73 percent in
2005 to 10.41 percent in 2006.
• The numbers are better for the 15 local companies in the
Fortune 500, with 13.77 percent women board members. However,
this lags the national 2006 Catalyst figure of 14.6 percent for
Fortune 500 companies overall.
• The percentage of women leaders in business serving in
executive positions remained stagnant - with 8.7 percent in
2006, compared to 8.61 percent in 2006. This number is tracked
because it represents a key “pool” for board candidates. Of
those executives listed as most highly compensated, women made
up 6.48 percent of those reported as top earners.
• Overall racial diversity on boards decreased by 1 percent,
while the number of seats filled by African-American women
declined from 7.14 percent in 2005 to 5.75 percent in 2006. The
number of Asian-American women holding board seats also dropped,
from 2.38 percent in 2005 to 1.08 percent in 2006.
• In 2005, 43 companies had no female board members; in 2006
that number dropped to 40, a positive sign.
• It appears that “early adopters” – those companies which have
added women directors over the past few years – are gaining
momentum. Published research points to the critical mass or
“tipping point” of a minimum of three female board members or 25
percent. In our region, seven area companies – Charming Shoppes,
Inc., CIGNA Corporation, Genesis HealthCare Corporation,
Harleysville National Corporation, Kenexa Corporation, Penn
Virginia Resource Partners, and Mothers Work, Inc., now have
boards comprised of at least 25 percent women members.
The report, now available online at
www.foew.com,
shows that despite what is a significant pool of qualified
female executives and an acknowledgement of the importance of
boards reflecting the demographics of their constituencies, most
area public companies are still not making sufficient progress
to place women on their corporate boards.
What Does This Mean?
“At the current improvement rate, it will take nearly 50 years
for executive women leaders in business to reach gender parity,
and nearly 75 years to reach parity in board seats,” said Elva
L. Bankins, President of The Forum of Executive Women, and
Senior Vice President at CEO Resources, Inc. “While there is
some encouraging data, the numbers are essentially flat. So we
must continue to engage in discussions with our corporate
leaders to identify the obstacles and take advantage of all
opportunities to make strategic and meaningful improvements. It
is essential that we remove the barriers that are keeping our
region from reaching its fullest potential.”
”There is greater pressure on companies today than ever before,”
said Bankins. “Times have changed. Having female board members
is not just ‘the right thing to do,’ but is essentially required
in today’s climate of increased corporate governance scrutiny
under Sarbanes Oxley. We can only hope that United States
companies will make more rapid progress voluntarily before
further regulatory intervention. If not, we may just have to
learn from countries like Norway. In 2002, with only 3 percent
female representation on boards, Norway mandated that 40 percent
of its public companies’ board members be female. And that
certainly got people’s attention.”
"Faced with a war for talent and demanding expectations for
performance, organizations that promote women into leadership
positions will have an opportunity to add diversity, capability,
momentum and a strong ethical base to their ranks", said Tara
Weiner, Managing Partner Greater Philadelphia, Deloitte & Touche.
"We need to recognize that tapping into the full pool of talent
makes economic sense in a competitive landscape."
Published research also shows a strong correlation between
higher shareholder returns and a higher proportion of women
leaders in business serving as executives. A decades-long study
of Fortune 500 companies by the Glass Ceiling Research Center at
Pepperdine University showed that the companies with the very
best records for promoting women tended to be the most
profitable. Gender-diverse companies are 69 percent more
profitable, according to a study published several years ago in
the Harvard Business Review.
“It is often the female board members who raise the most
questions about how a company is cultivating a diverse pool of
employees to support its succession planning and whether the
pool includes women and people of color,” says Vicki W. Kramer,
co-author of “Critical Mass on Corporate Boards: Why Three or
More Women Enhance Corporate Governance,” released last fall by
the Wellesley Centers for Women. According to the study, three
women board members are the “tipping point.” Only 76 boards
among the Fortune 500 have three or more female members, and
only seven in this region meet that threshold.
“It’s a mindset among top executives,” said Michael Useem,
Professor of Management at The Wharton School at the University
of Pennsylvania. “But research confirms that when governing
board members are diverse, their firms are less likely to break
the law and more likely to perform well.” A July 2007 study by
New York-based Catalyst found that “gender stereotyping” was one
of the key barriers to women’s advancement in corporate
leadership, regardless of leadership styles, resulting in
organizations’ routinely underestimating and underutilizing
women’s leadership talent.
As a result of these statistics and studies, The Forum of
Executive Women is focusing its efforts on several fronts to
increase the number of women on corporate boards. The Forum
offers direct support by providing names of qualified female
candidates to companies seeking to diversify their boards. The
group also continues to work closely with search firms that
advise corporations on board appointments; and to mentor and
coach rising women to develop their leadership skills. The Forum
will also work with women leaders in business who are already on
corporate boards to increase the number of boards on which they
serve, and work more closely with those “early adopter”
companies. A new initiative will help build critical mass by
targeting those 40 companies who have no female board members --
requesting direct meetings with each of them over the next 24
months to identify and resolve barriers.
The Forum also continues to share information with a network of
similar regional organizations across the United States, all of
which work to advance women to positions of power in the
business world, primarily to boards of directors and executive
suites. All of the regional data, including California, Chicago,
Florida, Georgia, Massachusetts, Michigan, Philadelphia and
Wisconsin, will be available in Spring 2008.
The “Women on Boards 2007” report is a joint initiative of the
Forum of Executive Women and Deloitte, which helped fund and
conduct the research. Founded in 1977, The Forum of Executive
Women, a network of 300 of the most influential women leaders in
business in the region, fulfills its mission to advance women
leaders by supporting women in leadership roles, promoting
parity and serving as a resource for the corporate world,
mentoring young women for future leadership, and providing a
forum for the exchange of views, contacts and information. For
support in identifying talented women for corporate boards, or
additional information, email info@foew.com or visit
www.foew.com.
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