Enterprising Women

by Dondi Saunders GLASS CEILING Is Boardroom Equality the Last Glass Ceiling? “ I know we’ve come so far, but we’ve got so far to go.” This catchy line from Hairspray says it best; the lyrics continue, “the road’s been filled with twists and turns, but that’s the road that got us here.” That road is not unlike the journey women have undertaken for decades. The fight for equal representation for women in business has been long-fought. It spans from the 1920s when women entered the workforce in droves amid the rise of big business and one of the world’s strongest economies, to today, when female CEOs are leading profitable companies, making headlines and providing futuristic vision. But that line from Hairspray still rings true—we still have so far to go. In the United States, while women hold 52% of all U.S. management and professional-level jobs , they only make up about 22% of S&P 500 board seats, with 12 companies having no female representation on their boards whatsoever. Women shouldn’t be in the boardroom just because it’s the right thing to do. Women offer a diversity of thought, perspective and unique skills that drive innovation and creativity, leading to a stronger bottom line. In fact, numerous research studies, including one by Grant Thornton , prove that diverse boards run companies that are more profitable than their industry competitors. Further, a study from the Peterson Institute for International Economics found a correlation between higher profits and companies with women in executive leadership positions. However, a Catch-22 between perception and discovery make it nearly impossible to have a watershed moment for female board representation. Seat’s taken. But for how long? While the pool of talent is overflowing, public corporations often lack term or age limits for board members, meaning open seats are sparse. In 2018, only 8% of S&P 500 board seats opened up. That’s just the tip of the iceberg. Board searches have both a discovery problem and a perception problem. The perception—that there are not enough qualified women—is compounded by searches that typically start by examining (mostly male) current boards and their (mostly male) networks. Boards also look to current CEOs to fill these roles, but only 4% of S&P 500 CEOs are women, and that number is shrinking. In 2018, female Fortune 500 CEOs dropped by 25% , from 32 to 24. If these numbers were higher, we would most certainly see increased female board representation. Clearly, we need major changes to drive sustainable board diversity. And there are some glimmers of hope. In 2018, California signed into law a bill requiring publicly traded companies headquartered in the state to have a minimum of one woman on their boards by the end of 2019. By July 2021, these companies must have two female directors if the company has five directors on its board, or three women if it has seven directors. “We are not going to ask anymore,” said one of the bill’s co-authors, Sen. Hannah-Beth Jackson (D-Santa Barbara). “We are going to require this because it’s going to benefit the economy. It’s going to benefit each of these companies.” Furthermore, New Jersey has proposed a similar bill requiring many public companies based in the state to have at least one female director by the end of 2019 and three women on these boards by 2021. It’s a sign of things moving in the right direction. But widespread, sustained change hinges on federal legislation. The House and Senate recently introduced corporate diversity bills that would require every public company to disclose board diversity data in proxy statements, and also disclose if the board has a strategy to promote diversity. In a coordinated effort, the SEC issued a new interpretation relating to director qualifications and diversity, which could impact proxy statement disclosures for publicly traded companies. Without necessary legislation, the dial won’t move. The deferential between discovery and perception is just too wide to avoid drastic measures to spur change and advance women the final frontier of business—the last glass ceiling. As those lyrics go: “It’s so clear, every year we get stronger, but baby, we’ve got so far to go.” DONDI SAUNDERS is the founder of the executive search firm Levia Partners. She is an advocate of value-driven female leaders in the C-suite and their representation on corporate boards. 64 enterprising Women