Two interesting, totally unrelated news stories this past week concern the important issue of the lack of women on public company boards. I can't help but think the days of the testosterone parade of CEOs in America may be waning, based on a recent story in the LA Times headed "Many highly paid CEOs are failures."
The article says, "Nearly 40% of the nation's best-paid chief executives over the last two decades were either fired, forced to take government bailouts, or in charge of companies that paid huge amounts in fraud related claims."
Forty percent! What's it going to take for the business world to realize that keeping women "away from the table" is suicidal? Only about four percent of CEOs of the F500 are women, and they probably aren't as "highly paid" as their male counterparts.
The second news story was "California Senate calls for gender parity on California public corporate boards." That's the first government resolution of its kind that I know of, although some other states have refused to invest public funds in companies without diverse boards of directors.
So where do these two stories meet? Right at the juncture of the dearth of women as senior level executives -- ready to succeed to CEO or "qualified" to become a corporate director, according to outdate criteria.
Betsy Berkhemer, southern California chair of Women Corporate Directors and author of The Board Game: How Smart Women Become Corporate Director, says, "The problem of women on boards is not supply. The pipeline is bursting! The roadblock is lack of demand. Male board members hang onto their seats well past the suggested age of retirement. And when the rare openings do occur, boards don't consider women to fill them."
In the 21st century, we tend to think women have "made it." And in many ways we have. But ponder this -- McKinsey & Company, a well-known management consulting firm, conducted a longitudinal study of the largest corporations from 1970-2000 and found that although women were 53 percent of new hires, only 26 percent were promoted to executive-level positions. That's half!
Despite this appalling and utterly unfair reality, some amazingly determined and over-qualified women have made it through the boardroom doors. Fifty-eight of them tell their stories in The Board Game. They demonstrate career choices that will enable other women to join them, because it usually takes more than one woman on an all-male board to positively influence decisions.
Is there any doubt after 2008 that American businesses need to make better decisions? And the research is solid that women make a profitable difference. According to 2012 Credit Suisse research, "net income growth for companies with women on their boards averaged 14% over a six-year period, compared with 10% for those with no women directors."
The California resolution states that the State "has a significant stake in both protecting shareholders ... as well as setting policies that enable them to perform better."
Amen.