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Saying "No" to All-Male Corporate Boards

Posted: 04/ 6/11 05:12 PM ET

Each year, we hear the latest, discouraging figures on the glacial progress women have made in cracking the male-dominated board rooms of corporate America. According to a recent Catalyst study, women hold only 3 percent of the CEO positions and 15 percent of the board positions among Fortune 500 companies. It is time to ask why progress has been so slow and what can be done differently to accelerate it.

This failure is not due to lack of effort. Many well-motivated individuals and organizations have worked for years to alter this state of affairs, deploying a range of strategies aimed at encouraging companies to embrace gender diversity on their boards.

There is also considerable evidence that the paucity of women on corporate boards and management teams is costing us, as numerous studies underscore the nexus between greater board and management diversity, on the one hand, and improved corporate governance and financial performance, on the other. When women are at the table, the discussion is richer, the decision-making process is better, management is more innovative and collaborative, and the organization is stronger. This is particularly the case with a critical mass of women in leadership roles.

Moreover, the persistence of male-dominated boardrooms takes place against a backdrop of abysmal failures in corporate governance. The recent financial crisis is only the latest reminder that many boards of directors are simply not doing their job. And if this is true, then the old canard that "there aren't enough qualified women" to fill more board seats can be turned on its head: After all, the (mostly) men who led so many of our largest financial institutions to ruin turn out not to have been very "qualified" either.

But there is one indisputable fact about non-diverse boards that we never seem to acknowledge, perhaps because the truth hurts: we elect them. That's right, even those of us who think that gender discrimination is wrong, and that women should be better represented in corporate board rooms -- we elect these non-diverse boards, often unwittingly, year after year.

How is that? Well, all publicly traded corporations send out a proxy ballot to their shareholders in advance of their annual general meeting, with a list of director nominees to serve on the company's board. The shareholders -- or at least those who vote -- then ordinarily rubber stamp this list of director nominees, which means, in most cases, either no women or a slate of nominees where women are grossly underrepresented.

Why do we rubber stamp all-male boards while we profess to believe that more diverse boards are needed? Because we either don't vote our proxies at all or we assign them to someone else who votes them for us, sometimes contrary to our values and our interests. If we own stock directly, many of us simply throw away the proxy ballot when it arrives in the mail. If we invest in stocks or mutual funds through a broker or investment adviser, or invest in a 401(k) or 403(b) plan at work, or in an IRA, we generally assign responsibility for voting our proxies to an agent. In either case, we are these companies' shareholders, and if we believe there needs to be greater gender diversity on corporate boards, then we need to start taking rather than abdicating responsibility. We need to become part of the solution rather than part of the problem.

There is a simple way to do this. We can withhold support for all-male director slates, or instruct whoever is voting our proxies to withhold such support. If enough investors ask this of their investment advisers, or their retirement plan administrators at work, or their mutual fund managers, then we can begin to make a difference. In fact, if we each wrote a letter to the companies, and enclosed it with our proxy ballot, letting them know why we are saying "no" to their board, the companies we own would begin to get the picture.

Companies will respond to investor pressure. They will listen to their shareholders if enough of us are willing to raise our voices. When it comes to increasing gender diversity on America's corporate boards, the business case is clear. Companies -- and their shareholders -- will actually be better off. Let your voice be heard. Take the time to vote your proxies for greater gender equality.

Jacki Zehner was the youngest woman, and first female trader, to be become a partner at Goldman Sachs and is Co-Chair of Women Moving Millions. Joe Keefe is the President and CEO of Pax World Funds.