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A Status Update on Women on Boards from
the Committee for Economic Development
November 2016
Every Other One
2
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
Contents
	 3	 Letter from the Co-Chairs
	 4	 Introduction: The Committee for Economic Development and Its Goal to
		 Increase the Number of Women on Corporate Boards
	 5	 Women in the Boardroom: Representation Progressing Too Slowly
	 8	 Economic Benefits and Challenges of Increasing the Number of
		 Women Directors
	 10	 CED’s Commitment to Making This Issue a Priority for Businesses
	12	 The Every Other One Ambassador Initiative: Recent Findings
	 16	 Next Steps for the Every Other One Initiative
		Appendices
	 17	 Summary of Activities to Date
	 18	 Resources to Find Qualified Women Directors
	19	 Endnotes
3
The Committee for Economic Development of
The Conference Board (CED) is an independent
research and policy organization composed of
more than 170 business and academic leaders.
Since 1942, CED has provided nonpartisan,
reasoned solutions from business in the nation’s
interest—from the Marshall Plan and the Bretton
Woods Agreement in the 1940s to early childhood
education reform and campaign finance reform
in the 2000s.
In 2011, CED formed the Subcommittee on
Women’s Economic Contribution to study
women’s role in the economy, how to advance
women in the workplace, and why women are
underrepresented in the corporate boardroom.
Despite making up nearly half the workforce
and being more likely to hold a bachelor’s degree
than men,1
women occupy less than 18 percent
of Fortune 1000 corporate board seats.
In an effort to accelerate progress for women in
corporate boardrooms, CED launched the Every
Other One initiative in 2014. Every Other One
advocates that if every other corporate board seat
vacated by a retiring board member were filled by
a woman, while retaining existing female seats,
women would occupy nearly a third of board seats
in the next five years and ultimately reach parity.
As part of the Every Other One initiative, CED
outlines multiyear guidelines implemented
through direct outreach from our “ambassadors”
to CEOs and chairs of nominating and gover­
nance committees of Fortune 1000 companies.
The initiative began with a letter sent to Fortune
1000 nominating and governance committee
chairs, signed by CED Members—who are
Fortune 500 CEOs, senior executives, university
presidents, and policy experts—describing the
importance of increasing the number of women
on corporate boards.
As of November 2016, 37 ambassadors have held
peer-to-peer discussions with board nominating
committee chairs and CEOs to uncover the
challenges involved in increasing the number of
women on boards. This report shares the findings
from the first round of meetings.
We would like to thank the CED Members who
served on the subcommittee that prepared this report
and the Policy and Impact Committee members
who provided time and effort in its formation.
Debra Perry Diana Solash Jane Stevenson
Co-Chairs, Women’s Economic Contribution Subcommittee
4
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
Introduction: The Committee for Economic Development and
Its Goal to Increase the Number of Women on Corporate Boards
The Committee for Economic Development of
Conference Board (CED) is a nonprofit, nonpartisan,
business-led public policy organization that delivers
well-researched analysis and reasoned solutions
to our nation’s most critical issues.
Since its inception in 1942, CED has addressed
national priorities to promote sustained economic
growth and development to benefit all Americans.
CED’s work in those first few years led to significant
policy accomplishments, including the Marshall
Plan, the economic development program that
helped rebuild Europe and maintain the peace; and
the Bretton Woods Agreement that established the
new global financial system and both the World
Bank and International Monetary Fund.
Today, CED continues to play an important
role through its trusted research and advocacy.
Composed of leading business executives,
CED lends its voice and expertise on pressing
policy issues. In recent decades, CED has made
significant contributions across a broad portfolio,
including pre-K education importance and
funding, bipartisan campaign reform, corporate
governance reform, U.S. fiscal health, academic
standards in K-12 education, postsecondary
education access and achievement, importance of
STEM education, immigration, free trade, foreign
assistance, women on corporate boards, Medicare
and broader healthcare reform, crony capitalism,
inequality, judicial selection reform, child care,
the role of business in promoting educational
attainment, digital learning, teacher compensation
and quality, corporate short-termism, federal tax
reform, social security, innovation and growth,
reducing global poverty, welfare reform, and more.
CED’s work is based on seven core principles:
sustainable capitalism, long-term economic
growth, efficient fiscal and regulatory policy, com-
petitive and open markets, a globally competitive
workforce, equal economic opportunity, and
nonpartisanship in the nation’s interest. CED’s
research findings are disseminated widely,
achieving tangible impact at the local, state, and
national levels.
In accord with this mission, CED views increased
representation of women in the boardroom
as both an economic imperative and a wider
societal goal. Numerous studies indicate that
diversity in corporate decision making improves
performance across several measures, including
share price, return on equity, and return on sales.
Furthermore, having a diverse board also affirms
a company’s commitment to inclusion, which
is imperative to attracting the talent needed to
drive long-term outperformance. Thus, advancing
women to corporate board positions is not just
a women’s advancement issue—it’s an issue of
American competitiveness in a global economy.
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
5
Women in the Boardroom: Representation Progressing Too Slowly
Women are major contributors to the U.S. economy—
they are the primary breadwinners in over 40 percent
of households and hold more than 50 percent of
personal wealth—yet their representation in corporate
leadership positions is low.2
Despite earning almost
10 million more degrees than men since 1982 and
making up nearly half of the workforce, women
occupied less than 18 percent of Fortune 1000
corporate board seats in 2015.3
While many companies have said they would like
to increase the number of women on their boards,
progress has been slow: the current level of female
representation is only a few percentage points
higher than it was in 2011.4
At this rate of progress,
it will take decades to reach gender parity on
Fortune 1000 boards.
Women are gaining board seats, but at a sluggish pace
Sources: 2020 Women on Boards Gender Diversity Index: 2011-2015 Progress of Women on Corporate Directors by
Company Size, State and Sector (Jamaica Plain, MA: 2020 Women on Boards), www.2020wob.com/sites/default/files/
2020GDI-2015Report.pdf. 2020 Women on Boards Gender Diversity Index: 2011-2014 Progress of Women on Corporate
Directors by State, Sector and Size of Company (Jamaica Plain, MA: 2020 Women on Boards), www.2020wob.com/sites/
default/files/2020GDI-2014Report.pdf.
Percent of
Women on
Fortune 1000
Boards
Total
Number of
Women
Average
Number of
Women on
Boards
2011 2012 2013 2014 2015
1440
1.5 1.6 1.7 1.8 1.9
1493 1526 1585 1771
= 100
14.6% 15.6% 16.6% 17.7% 17.9%
Women on Fortune 1000 Boards, 2011–2015
6
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
Every Other One:
A Status Update on Women on Boards from the Committee for Economic Development
Gender Diversity of Fortune 1000 Boards by Sector, 2015
Note: The shaded numbers represent
the number of companies.
Women are underrepresented on boards across all sectors of the economy
18.3%
Communications
16
18.5%
Consumer Cyclical
190
21.8%
Consumer Defense
79
11.5%
Energy
83
20.8%
Financial Services
123
15.9%
Industrials
171
19.0%
Real Estate
15
15.8%
67
Basic Materials
15.8%
Healthcare
72
16.4%
Technology
99
21.0%
Utilities
45
Source: 2020 Women on Boards Gender Diversity Index: 2011-2015 Progress of Women on Corporate Directors by Company Size,
State and Sector (Jamaica Plain, MA: 2020 Women on Boards), www.2020wob.com/sites/default/files/2020GDI-2015Report.pdf.
7
Source: Catalyst, 2014 Catalyst Census: Women Board Directors (New York: Catalyst, 2015)
www.catalyst.org/knowledge/2014-catalyst-census-women-board-directors.
Japan
Portugal
India
Hong Kong
Ireland
Austria
Switzerland
Spain
Germany
Australia
United States
Canada
Netherlands
Denmark
United Kingdom
Belguim
Sweden
France
Finland
Norway 35.5%
29.9
29.7
28.8
23.4
22.8
21.9
21.0
20.8
19.2
19.2
18.5
18.2
17.0
13.0
10.3
10.2
9.5
7.9
3.1
Global Comparison of Women on Boards
Women on boards: the US falls behind globally
8
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
Economic Benefits and Challenges of Increasing
the Number of Women Directors
Recent research supports a strong economic
incentive for having more women on boards:
companies with greater board diversity are
more competitive because they better connect
with constituents, employees, investors, and the
communities where they operate. Research from
McKinsey & Company, Catalyst, and Credit Suisse
has documented that having women on boards
improves corporate financial performance and raises
stock market valuations, as well as provides other less
tangible benefits. However, barriers to increasing the
number of women who serve on boards remain.
Benefits
The financial benefits of greater female representation
are extensive. According to an analysis by McKinsey
& Company, companies that have leadership teams
in the top quartile of gender diversity were 15 percent
more likely have financial returns that were above
their national industry mean.5
Researchers at the
Peterson Institute for International Economics found
that for profitable firms, a move from zero to 30
percent female leaders is associated with a 15 percent
increase in the net revenue margin.6
Breaking this down further, researchers at Catalyst
found that companies with the most women board
directors (WBD) outperform those with the fewest
WBD on return on sales by 16 percent and on return
on invested capital by 26 percent; and companies
with sustained high representation of WBD (defined
as those with three or more WBD in at least four
of five years) significantly outperformed those
with sustained low representation by 84 percent on
return on sales, by 60 percent on return on invested
capital, and by 46 percent on return on equity.7
Likewise, a study by Credit Suisse found that
between the beginning of 2012 and June 2014,
large companies with market capitalization
exceeding $10 billion with at least one women on
the board outperformed similar companies with
no women on the board by 5 percent on a sector-
neutral basis.8
Researchers also found that return
on equity of firms with women on their boards is
also higher than those without, signaling premium
returns, which are then reflected in higher price-
to-book values. Furthermore, the proportion of
earnings paid out as dividends to shareholders
is higher at firms with more than 10 percent of
women in their top management as compared to
those with fewer women.9
According to McKinsey’s study, more diverse
companies are also better able to attract top talent,
improve their customer orientation, have higher
employee satisfaction, and make more informed
decisions, which leads to a virtuous cycle of
increasing returns.10
The Peterson Institute found
a correlation between the presence of women on
boards and the presence of women in executive
ranks—a more gender-balanced board may
indicate a more balanced executive team.11
Challenges
Despite these benefits, numerous obstacles prevent
women from advancing through the ranks of senior
leadership positions within corporations, including
board seats. In the mining and oil and gas industries,
for instance, this underrepresentation could be due
to a low number of women graduates with degrees
in science, technology, engineering, and math.12
Even though women have been outnumbering
men at degree-granting colleges since the 1970s.13
9
Other reasons include unconscious bias,14
cultural
biases such as stereotyping and the perception
that women are less committed to their work, and
workplace biases such as the gender pay gap and
promotion practices.15
For example, in finance,
men and women take entry-level positions in
roughly equal numbers, but the number of women
shrinks by about half by the middle-management
level, leaving fewer female candidates to select for
leadership positions.16
Many foreign nations have imposed gender quotas as
a solution for overcoming the obstacles to increasing
the number of board seats held by women. But the
jury is still out as to the effectiveness of quotas.
A Credit Suisse study found they can be
detrimental. Since 2006, companies in Norway
are required to fill at least 40 percent of their
board seats with women. According to the report,
the organizations that were most affected by
this law saw their total firm value (measured as
total market value over total asset value) drop
by 12 percent for every 10 percent increase in
female board members.17
Contrarily, the Peterson
Institute found no evidence that board quotas have
any significant impact, positive or negative, on
company performance.18
10
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
CED’s Commitment to Making This Issue a Priority for Businesses
To improve progress, CED formed a Women’s
Economic Contribution Subcommittee∗
in 2011.
This group was composed of 18 prominent women
and men from the for-profit and nonprofit sectors
and was tasked with studying the issue and making
recommendations to increase the representation of
women on U.S. corporate boards.
In 2012, CED issued a policy statement, Fulfilling the
Promise: How More Women on Corporate Boards
Would Make America and American Companies
More Competitive, which urged companies to
expand opportunities for women and make it a
top priority to develop the talents and advance the
careers of female staff who have been identified
as potential leaders. It explained why the gender
composition of corporate boards is important
for global competitiveness, why existing efforts
have not yielded enough progress, and why
nominating committees do not do enough to put
forward women candidates. The statement calls for
more proactive solutions to the supply challenges,
including more effective ways to identify and
advance talented women.
Speakers at the launch of Every Other One at CED’s 2014
Fall Policy Conference: Beth Brooke-Marciniak, Peter Grauer,
Barbara Krumsiek, Anne Lim O’Brien, and Gail Becker
(left to right).
In 2014, CED launched its Every Other One
initiative (EOO), which aims to change the
behavior of boards and encourage them to replace
every other retiring director with a qualified
woman. The initiative kicked off with CED’s report
Every Other One: More Women on Corporate
Boards, which makes the business case for more
women on boards; outlines CED’s multiyear plan
to have direct outreach to CEOs, board chairs,
and board nominating and governance committee
chairs of Fortune 1000 companies; and provides
recommendations for expanding the criteria of
qualified female board members.
To coincide with the report’s release, CED
sent a letter signed by the Women’s Economic
Contribution subcommittee co-chairs to Fortune
1000 nominating and governance committee
chairs, describing the importance of increasing
the number of women on corporate boards.
In addition, the organization hosted a panel at
its 2014 Fall Policy Conference on “Women in
Corporate Leadership” to inform the public about
the launch of Every Other One.
CED Members Kathy Hannan, Martha McGarry, and
Angela Braly (left to right) provide remarks on the topic of
women in leadership at CED’s 2015 Fall Policy Conference.
∗
Originally called the Women’s Economic Empowerment Subcommittee
11
In 2015, CED further promoted the issue by co-
hosting a meeting with the Business Roundtable;
presenting twice (spring and fall) at The Conference
Board Leadership Council on Advancing Women, as
well as at The Conference Board Women’s Leadership
Conference; presenting at the SAIS Global Conference
on Women in the Boardroom; hosting a panel
at CED’s 2015 Fall Policy Conference on “Why
Women Matter in the Boardroom”; and partnering
with the Women’s Forum of New York at the 2015
Breakfast of Corporate Champions.
Other work in this area included releasing “More
Women on Corporate Boards, A Roadmap for
Progress,” which outlines the problem, rationale,
and CED’s solution for increased gender diversity
on corporate boards.
The roadmap was distributed at CED meetings
and to board nominating and governance committee
members. In addition, CED CEO Steve Odland
published the op-ed, “A New Year’s Resolution for
the Boardroom,” on CNBC.com in December 2015.
During the first half of 2016, CED launched its
ambassador program to promote Every Other One
via peer-to-peer conversations with Fortune 1000
CEOs and nominating committees at companies
whose boards contain less than 20 percent women.
(For more information on the ambassador program,
please see pages 12 to 15.) The organization also
convened a congressional briefing on boardroom
gender diversity in March 2016.
For a complete list of activities related to
Every Other One, see page 17.
12
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
The Every Other One Ambassador Initiative: Recent Findings
The Every Other One initiative contends that if
every other seat vacated by a male board member
due to retirement was filled by a woman, while
retaining existing female seats, women would
occupy nearly a third of board seats in the next
five years and ultimately reach parity.
CED believes that the fastest way to achieve change
is through peer-to-peer conversations among
current board members. Since January 2016, CED
has recruited 37 senior executives, many of whom
are former or current Fortune 1000 CEOs or who
have extensive board connections, to serve as
ambassadors to engage their peers in discussions
on gender parity in the boardroom.
These ambassadors have met with CEOs and chairs
of board nominating and governance committees
at companies whose boards contain less than 20
percent women to discuss the importance and
benefits of gender diversity on boards. They have
discussed the specific obstacles these boards face in
identifying and recruiting female board candidates,
and how CED and business leaders can provide
resources and help companies identify and recruit
board-ready women.
Ambassadors raised questions such as:
Why do you think your board has
so few women?
Would you consider adopting the
Every Other One approach for your
board recruitment?
Does the issue of gender diversity
come up during board meetings?
Can gender diversity and CED’s
Every Other One initiative be on the
agenda at your next board nominating
committee meeting?
Are there obstacles in identifying
qualified women?
What obstacles have you encountered
when you have looked for women to
join your board?
Was adding a woman to the board
a priority when considering potential
new board candidates?
Has the nominating and governance
committee succeeded in identifying and
electing a woman or women to the board?
What resources could CED provide to
help overcome these obstacles?
Any reactions to the Every Other
One approach?
13
What the Ambassadors Learned
As of November 2016, 37 ambassadors have held
approxi­mately 60 conversations with Fortune 1000
CEOs or chairs of board nominating or governance
committees. Since the ambassadors began their
outreach, several target companies have reached
20 percent or higher female representation on their
boards. While CED does not take full credit for
this accomplishment, the organization believes its
discussions played a role. Below is a summary of
what the ambassadors heard in their conversations.
Barriers to adding women
Although many companies express interest in
expanding board diversity, this interest is not
translating into results for a wide range of reasons.
•	 Adding women to boards is top of mind for only
a minority of directors. Boards need several
members to support adding women for it to
become a priority.
•	 The notion of adding a woman can be derailed
easily by even one recalcitrant director with
comments like, “I think we can do better than
that,” or “We should be looking for the best
overall athlete.”
•	 Unconscious bias presents a major obstacle.
Some men are aware of this bias, but there is
often no champion for diversity on the board.
•	 Some all-male boards have discomfort with
adding a woman because it changes board
dynamics. Some have the same sentiments
when adding a second woman to a board.
•	 Some boards experience very little turnover,
making it more difficult to bring on women.
For example, one ambassador said that there
has been only one vacancy in six years on one
of his boards and eight years on another.
•	 Smaller companies can have a harder time
finding qualified women because their networks
for identifying board-ready women are smaller,
search firms can be cost-prohibitive, and they
are less able to risk having someone who is not
a good fit since the board is smaller.
•	 Some companies find it difficult to identify
women who meet qualifications of the search.
•	 Board nominating and governance committees
define candidate qualifications too narrowly.
For example, they make having specific job
titles such as CEO or CFO a prerequisite for
consideration, instead of looking at specific skill
sets. This limits the pool of women candidates
since relatively few women have held these
positions. Boards often have a hard time
accepting that a woman who has not been a
CEO can be an effective board member.
•	 Companies that had used search firms felt
that the firms kept showing them the “usual”
women—those who were often not interested in
joining a board outside the Fortune 500, those
who already sit on too many boards, or those
who were already choosing between multiple
board positions.
•	 One ambassador said that her company used
a search firm to fill one board position and
used recommendations from existing board
members to fill another. The search firm
was much more successful in nominating
female candidates. Relying on the “who you
know” method perpetuated the “old boys’
club.” Some boards have a general reluctance
to seriously consider candidates that no
one on the board knows and therefore can’t
personally vouch for.
•	 Many boards consist exclusively of current and
former CEOs. The implications of this for gender
diversity are unclear. According to one ambassador,
many CEOs are used to reaching conclusions
quickly and stating them authoritatively, which
often shuts down further comment and discussion.
On the other hand, another ambassador said that
when former CEOs speak up about the benefits
of board diversity, other board members are
more likely to listen.
•	 Boards tend to identify gaps in the board’s
expertise first and then add other desired
characteristics, like gender, as secondary goals.
14
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
Things are improving—slowly
Companies that make board diversity a priority
have made progress in adding more women to
their boards.
•	 Some boards already have substantial represen-
tation by women. One Fortune 500 company
has had at least 50 percent female board repre-
sentation for many years because the company
understands that its customers are primarily
women. A number of other companies have
been adding women recently because they
recognize that women drive 70 to 80 percent of
consumer spending in the United States through
buying power and influence.19
•	 Most of the women added to boards in recent
years have been elected to seats previously held
by men who have retired.
•	 One board, which recently has added three
additional women to the two existing women
directors, has a stated objective to continue
adding more women.
•	 Another board has achieved 40 to 50 percent
female representation over the past nine years.
The ambassador said there were no obstacles
in identifying qualified women once the board
made it a priority, and that it eventually had
more candidates than it had open slots.
•	 Some boards are beginning to look outside the
United States for qualified women.
How business advocates can help
Business leaders need to take the initiative to
increase the number of women on boards. CED’s
ambassadors outline the following steps that
business leaders can take:
•	 Create open, credible databases of board-ready
women. Women interested in joining a board could
register and post their resumes in a central location
that other companies, including the smallest
ones, could access. Candidates in the databases
could be endorsed by current board members.
•	 Celebrate boards with more than 30 percent
women (see table below).
Celebrating Champions of Boardroom Gender Diversity
Top 10 F1000 boardroom diversity champions
by percentage change of female directors,
2009–2014
Top 10 F1000 boardroom diversity
champions by percentage of female
directors, 2009–2014
Company 2009 2014
Percent
change Company
Percent
female
Dollar General 0.0% 37.5% 37.5% Avon Products Inc. 66.7%
Big Lots! 11.1 44.4 33.3 Navient Corporation 53.9
Netflix 0.0 33.3 33.3 WhiteWave Foods 50.0
GAP Inc. 0.0 30.0 30.0 Ulta Beauty 50.0
Pinnacle Entertainment 0.0 28.6 28.6 Ann Inc. 50.0
Abbott Laboratories 8.3 36.4 28.0 Estée Lauder Companies 46.7
Ulta Beauty 22.2 50.0 27.8 Macy's 46.2
Realogy 16.7 44.4 27.8 Procter  Gamble Co. 45.5
General Dynamics 0.0 27.3 27.3 Alaska Air Group 45.5
The Hartford 11.1 36.4 25.3 Levi Strauss  Co. 45.5
Source: “The Changing Face of Fortune 1000 Boardrooms, in Five Charts,” Equilar, October 6, 2015,
www.equilar.com/blogs/48-the-changing-face-of-fortune-1000-boardrooms.html.
15
•	 Look beyond CEOs and CFOs as the only qualified
pool of people to include on a board. Other
candidates to consider include academics (faculty
and senior leadership); entrepreneurs; nonprofit
and public-sector executives; retired senior
attorneys; retired accounting partners; investment
bankers and money managers; risk management,
compliance, and governance officers; divisional
presidents; management consultants; and women
with broad executive and management experience,
including PL experience. One ambassador
suggested reaching as far into an organization as
middle management to expand the pipeline of
board-ready women.
•	 Institute methods to refresh boards, such as
through term limits, age limits, and rotating out
underperforming directors. (Term limits would
be more difficult to manage because it often takes
a new director two to three years to get fully
involved, said one ambassador.)
•	 For investors: ask why there are so few
women on boards of the companies they
are investing in.
•	 Convey to boards and nominating committees
the competitive advantage that having women’s
perspectives on boards provides.
•	 Clearly define the skills that the company will
need to implement future growth strategies
and fill those gaps on the current board.
•	 Encourage current directors and senior
management to develop their own pipeline
of qualified female board candidates.
•	 Require search firms to present a broad pool
of women candidates.
•	 Ask search firms for their input regarding the
types of expertise boards might find valuable.
•	 Have at least two women on every slate.
Research shows that having only one woman
on a slate virtually guarantees that no women
will be selected. But when there are at least two
women on a slate, the chance that a woman is
selected increases to 50 percent.20
How CED can help
The ambassadors also had suggestions on actions
CED should take. They include:
•	 Provide thought leadership relating to broader
qualifications for potential board candidates.
•	 Provide information regarding the benefits
of broader board diversity and non-CEO
board members. Highlight how such board
members could enhance the depth and scope of
discussion about issues facing the board.
•	 Partner with other business organizations to
determine how they could work together to
increase gender diversity on corporate boards.
•	 Pool existing resources that boards could tap
when seeking board members. For example,
each CED member could provide names of two
board-ready women to create a candidate pool
for companies seeking board members.
•	 Strongly encourage search firms to commit to
bringing more diverse slates to every search.
One ambassador said the search firms tend to
use the same group of people for every search
without doing the necessary work to find a more
diverse slate.
16
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
Next Steps for the Every Other One Initiative
Every Other One grew out of the premise that
business is essential for American prosperity and
that corporate boards are responsible for driving
long-term value. As research shows, more diverse
boards are better equipped to navigate the complex
and dynamic issues that companies now face.21
Yet women remain underrepresented in corporate
boardrooms—despite making up more than half
of the workforce. This underrepresentation has
been shown to result in negative consequences for
corporations’ bottom lines and for our nation’s
ability to compete globally.
For years, the argument has been made that, as
they increasingly participate in the workforce,
women will eventually make their way into
top company leadership positions, including
boardrooms. However, it’s become apparent that
the problem won’t fix itself. Women accounted
for 26.9 percent of new directorships at SP 500
companies in 2015.22
At this rate of progress, it will
take decades to reach parity. Instead, the business
community should seize this opportunity to show
meaningful leadership and foresight on an issue of
national importance.
Moving forward, CED plans to expand its
ambassador program and continue conversations
on the importance of boardroom diversity. CED
also plans to advance this issue by partnering with
other public-policy groups and business-sector
organizations, as needed. Ultimately, CED hopes
that these actions will help make the case for the
advancement of women on corporate boards.
CED still is seeking qualified executives to serve as
ambassadors. If you would like to be involved or
know someone else who you might be interested,
please contact CED’s Executive Vice President,
Michael Petro, at mpetro@ced.org. CED also
provides resources on its website for finding
qualified female directors. These resources can
also be found on page 18.
17
APPENDIX
Summary of Activities to Date
2014
•	 Launch Event Panel hosted by CED at 2014
Fall Policy Conference “Women in Corporate
Leadership.” Speakers included Mike Petro,
Beth Brooke-Marciniak, Gail Becker, Peter
Grauer, Barbara Krumsiek, and Kathleen
McLaughlin (November)
2015
•	 CED and Business Roundtable co-host meeting
with John Cridland, CEO of CBI, and UK
Ambassador to the US Peter Westmacott (March)
•	 CED and Susan Ness present before The
Conference Board Leadership Council on
Advancing Women (April)
•	 Madeleine Condit and Janice Ellig present
before The Conference Board Women’s
Leadership Conference (June)
•	 CED unveils the infographic “More Women on
Corporate Boards, A Roadmap for Progress,”
outlining the problem, the rationale, and the
CED solution for increased gender diversity
www.ced.org/pdf/CED_Toolkit_on_Gender_
Diversity.pdf (September)
•	 CED presents at the SAIS Global Conference on
Women in the Boardroom (September)
•	 Panel hosted by CED at 2015 Fall Policy
Conference, “Why Women Matter in the
Boardroom.” Participants included CED Members
Larraine Segil, Angela Braly, Kathy Hannan,
Martha McGarry, Jane Stevenson, Linda Chen,
and Congressman Don Beyer (D-VA) (October)
•	 CED partners with the Women’s Forum of
New York at the 2015 Breakfast of Corporate
Champions (November)
•	 CED presents before The Conference
Board Leadership Council on Advancing
Women (November)
•	 Steve Odland authors op-ed on CNBC,
“A New Year’s Resolution for the Boardroom,”
www.cnbc.com/2015/12/22/getting-more-women-
on-boards-commentary.html (December)
2016
•	 CED engages 37 “Ambassadors” to promote
Every Other One via peer-to-peer conversations
with Fortune 1000 CEOs and nominating
committees, focusing on companies with less
than 20 percent board gender diversity (January)
•	 CED convenes a congressional briefing, featuring
CED Members Madeleine Condit and Diana
Solash, on boardroom gender diversity (March)
18
Every Other One
A Status Update on Women on Boards from the Committee for Economic Development
APPENDIX
Resources to Find Qualified Women Directors
Equilar BoardEdge equilar.com/boardedge-issuers.html
Women’s Forum of New York womensforumny.org
Catalyst catalyst.org
Direct Women directwomen.org
Financial Women’s Association fwa.org
National Association of Corporate Directors nacdonline.org
The Boston Club thebostonclub.com
Women Corporate Directors womencorporatedirectors.com
19
Endnotes
1	 Nolan Feeney, “Women Are Now More Likely to Have a
College Degree Than Men,” Time.com, October 7, 2015,
http://time.com/4064665/women-college-degree/.
2	 Financial concerns of women, BMO Wealth Institute,
March 2015, p. 2, www.bmo.com/privatebank/pdf/Q1-
2015-Wealth-Institute-Report-Financial-Concerns-of-
Women.pdf.
3	 Mark J. Perry, “Stunning college degree gap: Women
have earned almost 10 million more college degrees
than men since 1982,” AEIdeas blog, May 13, 2013,
www.aei.org/publication/stunning-college-degree-
gap-women-have-earned-almost-10-million-more-
college-degrees-than-men-since-1982/; Women in the
labor force: a databook, U.S. Bureau of Labor Statistics,
Report 1059, December 2015, www.bls.gov/opub/
reports/womens-databook/archive/women-in-the-labor-
force-a-databook-2015.pdf; and Boardroom Diversity:
When Women Lead, 2020 Women on Boards, p. 2,
2016, www.2020wob.com/sites/default/files/2020GDI-
2016Report.pdf
4	 Women on Boards Gender Diversity Index: 2011-2015
Progress of Women Corporate Directors by Company
Size, State and Sector, 2020 Women on Boards, 4,
2015, www.2020wob.com/sites/default/files/2020GDI-
2015Report.pdf.
5	 Vivian Hunt, Dennis Layton, and Sara Prince, Diversity
Matters, McKinsey  Company, February 2, 2015, p.
1 (available at www.diversitas.co.nz/Portals/25/Docs/
Diversity%20Matters.pdf ).
6	 Marcus Noland, Tyler Moran, and Barbara Kotschwar,
Is Gender Diversity Profitable? Evidence from a Global
Survey, Peterson Institute for International Economics,
Working Paper 16-3, February 2016, p. 16, https://piie.
com/publications/working-papers/gender-diversity-
profitable-evidence-global-survey.
7	 Nancy M. Carter and Harvey M. Wagner, “The
Bottom Line: Corporate Performance and Women’s
Representation on Boards (2004–2008), Catalyst,
2011, p. 1, www.catalyst.org/knowledge/bottom-line-
corporate-performance-and-womens-representation-
boards-20042008.
8	 Dorothee Enskog, “Women’s Positive Impact on
Corporate Performance,” Credit Suisse, September 23,
2014, p. 2, www.credit-suisse.com/us/en/articles/articles/
news-and-expertise/2014/09/en/womens-impact-on-
corporate-performance-letting-the-data-speak.html.
9	 Credit Suisse, p. 3.
10	 McKinsey, p. 1.
11	 Peterson Institute, p. 9.
12	 Credit Suisse, p. 5.
13	 Matt Rocheleau, “On Campus, Women Outnumber
Men More Than Ever,” Boston Globe, March 28, 2016,
www.bostonglobe.com/metro/2016/03/28/look-how-
women-outnumber-men-college-campuses-nationwide/
YROqwfCPSlKPtSMAzpWloK/story.html.
14	 McKinsey, p. 1.
15	 Credit Suisse, p. 5.
16	 Peterson Institute, p. 5.
17	 Credit Suisse, p. 4.
18	 Peterson Institute, p. 7.
19	 Michael J. Silverstein, Kate Sayre, and John Butman,
Women Want More: How to Capture Your Share of the
World’s Largest, Fastest-Growing Market (New York:
HarperBusiness, 2009), www.catalyst.org/system/files/
buying_power_0.pdf.
20	 Stephanie K. Johnson, David R. Hekman, and Elsa T.
Chan, “If There Is Only One Woman in Your Candidate
Pool, There’s Statistically No Chance She’ll Be Hired,”
Harvard Business Review, April 26, 2016, https://
hbr.org/2016/04/if-theres-only-one-woman-in-your-
candidate-pool-theres-statistically-no-chance-shell-be-
hired.
21	 “Different Is Better: Why Diversity Matters in
the Boardroom,” Russell Reynolds Associates,
www.russellreynolds.com/en/Insights/thought-
leadership/Documents/different-is-better_0.pdf.
22	 Catalyst Census: Women and Men Board Directors,
Catalyst, 2016, www.catalyst.org/system/files/2015_
catalyst_census_final.pdf.
Every Other One
A Status Update on Women on Boards from the
Committee for Economic Development
November 2016
Committee For Economic Development of The Conference Board
1530 Wilson Blvd
Suite 400
Arlington, VA 22209
202.296.5860
www.ced.org

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Women On Boards Report Nov 2016

  • 1. A Status Update on Women on Boards from the Committee for Economic Development November 2016 Every Other One
  • 2. 2 Every Other One A Status Update on Women on Boards from the Committee for Economic Development Every Other One A Status Update on Women on Boards from the Committee for Economic Development Contents 3 Letter from the Co-Chairs 4 Introduction: The Committee for Economic Development and Its Goal to Increase the Number of Women on Corporate Boards 5 Women in the Boardroom: Representation Progressing Too Slowly 8 Economic Benefits and Challenges of Increasing the Number of Women Directors 10 CED’s Commitment to Making This Issue a Priority for Businesses 12 The Every Other One Ambassador Initiative: Recent Findings 16 Next Steps for the Every Other One Initiative Appendices 17 Summary of Activities to Date 18 Resources to Find Qualified Women Directors 19 Endnotes
  • 3. 3 The Committee for Economic Development of The Conference Board (CED) is an independent research and policy organization composed of more than 170 business and academic leaders. Since 1942, CED has provided nonpartisan, reasoned solutions from business in the nation’s interest—from the Marshall Plan and the Bretton Woods Agreement in the 1940s to early childhood education reform and campaign finance reform in the 2000s. In 2011, CED formed the Subcommittee on Women’s Economic Contribution to study women’s role in the economy, how to advance women in the workplace, and why women are underrepresented in the corporate boardroom. Despite making up nearly half the workforce and being more likely to hold a bachelor’s degree than men,1 women occupy less than 18 percent of Fortune 1000 corporate board seats. In an effort to accelerate progress for women in corporate boardrooms, CED launched the Every Other One initiative in 2014. Every Other One advocates that if every other corporate board seat vacated by a retiring board member were filled by a woman, while retaining existing female seats, women would occupy nearly a third of board seats in the next five years and ultimately reach parity. As part of the Every Other One initiative, CED outlines multiyear guidelines implemented through direct outreach from our “ambassadors” to CEOs and chairs of nominating and gover­ nance committees of Fortune 1000 companies. The initiative began with a letter sent to Fortune 1000 nominating and governance committee chairs, signed by CED Members—who are Fortune 500 CEOs, senior executives, university presidents, and policy experts—describing the importance of increasing the number of women on corporate boards. As of November 2016, 37 ambassadors have held peer-to-peer discussions with board nominating committee chairs and CEOs to uncover the challenges involved in increasing the number of women on boards. This report shares the findings from the first round of meetings. We would like to thank the CED Members who served on the subcommittee that prepared this report and the Policy and Impact Committee members who provided time and effort in its formation. Debra Perry Diana Solash Jane Stevenson Co-Chairs, Women’s Economic Contribution Subcommittee
  • 4. 4 Every Other One A Status Update on Women on Boards from the Committee for Economic Development Introduction: The Committee for Economic Development and Its Goal to Increase the Number of Women on Corporate Boards The Committee for Economic Development of Conference Board (CED) is a nonprofit, nonpartisan, business-led public policy organization that delivers well-researched analysis and reasoned solutions to our nation’s most critical issues. Since its inception in 1942, CED has addressed national priorities to promote sustained economic growth and development to benefit all Americans. CED’s work in those first few years led to significant policy accomplishments, including the Marshall Plan, the economic development program that helped rebuild Europe and maintain the peace; and the Bretton Woods Agreement that established the new global financial system and both the World Bank and International Monetary Fund. Today, CED continues to play an important role through its trusted research and advocacy. Composed of leading business executives, CED lends its voice and expertise on pressing policy issues. In recent decades, CED has made significant contributions across a broad portfolio, including pre-K education importance and funding, bipartisan campaign reform, corporate governance reform, U.S. fiscal health, academic standards in K-12 education, postsecondary education access and achievement, importance of STEM education, immigration, free trade, foreign assistance, women on corporate boards, Medicare and broader healthcare reform, crony capitalism, inequality, judicial selection reform, child care, the role of business in promoting educational attainment, digital learning, teacher compensation and quality, corporate short-termism, federal tax reform, social security, innovation and growth, reducing global poverty, welfare reform, and more. CED’s work is based on seven core principles: sustainable capitalism, long-term economic growth, efficient fiscal and regulatory policy, com- petitive and open markets, a globally competitive workforce, equal economic opportunity, and nonpartisanship in the nation’s interest. CED’s research findings are disseminated widely, achieving tangible impact at the local, state, and national levels. In accord with this mission, CED views increased representation of women in the boardroom as both an economic imperative and a wider societal goal. Numerous studies indicate that diversity in corporate decision making improves performance across several measures, including share price, return on equity, and return on sales. Furthermore, having a diverse board also affirms a company’s commitment to inclusion, which is imperative to attracting the talent needed to drive long-term outperformance. Thus, advancing women to corporate board positions is not just a women’s advancement issue—it’s an issue of American competitiveness in a global economy. Every Other One A Status Update on Women on Boards from the Committee for Economic Development
  • 5. 5 Women in the Boardroom: Representation Progressing Too Slowly Women are major contributors to the U.S. economy— they are the primary breadwinners in over 40 percent of households and hold more than 50 percent of personal wealth—yet their representation in corporate leadership positions is low.2 Despite earning almost 10 million more degrees than men since 1982 and making up nearly half of the workforce, women occupied less than 18 percent of Fortune 1000 corporate board seats in 2015.3 While many companies have said they would like to increase the number of women on their boards, progress has been slow: the current level of female representation is only a few percentage points higher than it was in 2011.4 At this rate of progress, it will take decades to reach gender parity on Fortune 1000 boards. Women are gaining board seats, but at a sluggish pace Sources: 2020 Women on Boards Gender Diversity Index: 2011-2015 Progress of Women on Corporate Directors by Company Size, State and Sector (Jamaica Plain, MA: 2020 Women on Boards), www.2020wob.com/sites/default/files/ 2020GDI-2015Report.pdf. 2020 Women on Boards Gender Diversity Index: 2011-2014 Progress of Women on Corporate Directors by State, Sector and Size of Company (Jamaica Plain, MA: 2020 Women on Boards), www.2020wob.com/sites/ default/files/2020GDI-2014Report.pdf. Percent of Women on Fortune 1000 Boards Total Number of Women Average Number of Women on Boards 2011 2012 2013 2014 2015 1440 1.5 1.6 1.7 1.8 1.9 1493 1526 1585 1771 = 100 14.6% 15.6% 16.6% 17.7% 17.9% Women on Fortune 1000 Boards, 2011–2015
  • 6. 6 Every Other One A Status Update on Women on Boards from the Committee for Economic Development Every Other One: A Status Update on Women on Boards from the Committee for Economic Development Gender Diversity of Fortune 1000 Boards by Sector, 2015 Note: The shaded numbers represent the number of companies. Women are underrepresented on boards across all sectors of the economy 18.3% Communications 16 18.5% Consumer Cyclical 190 21.8% Consumer Defense 79 11.5% Energy 83 20.8% Financial Services 123 15.9% Industrials 171 19.0% Real Estate 15 15.8% 67 Basic Materials 15.8% Healthcare 72 16.4% Technology 99 21.0% Utilities 45 Source: 2020 Women on Boards Gender Diversity Index: 2011-2015 Progress of Women on Corporate Directors by Company Size, State and Sector (Jamaica Plain, MA: 2020 Women on Boards), www.2020wob.com/sites/default/files/2020GDI-2015Report.pdf.
  • 7. 7 Source: Catalyst, 2014 Catalyst Census: Women Board Directors (New York: Catalyst, 2015) www.catalyst.org/knowledge/2014-catalyst-census-women-board-directors. Japan Portugal India Hong Kong Ireland Austria Switzerland Spain Germany Australia United States Canada Netherlands Denmark United Kingdom Belguim Sweden France Finland Norway 35.5% 29.9 29.7 28.8 23.4 22.8 21.9 21.0 20.8 19.2 19.2 18.5 18.2 17.0 13.0 10.3 10.2 9.5 7.9 3.1 Global Comparison of Women on Boards Women on boards: the US falls behind globally
  • 8. 8 Every Other One A Status Update on Women on Boards from the Committee for Economic Development Economic Benefits and Challenges of Increasing the Number of Women Directors Recent research supports a strong economic incentive for having more women on boards: companies with greater board diversity are more competitive because they better connect with constituents, employees, investors, and the communities where they operate. Research from McKinsey & Company, Catalyst, and Credit Suisse has documented that having women on boards improves corporate financial performance and raises stock market valuations, as well as provides other less tangible benefits. However, barriers to increasing the number of women who serve on boards remain. Benefits The financial benefits of greater female representation are extensive. According to an analysis by McKinsey & Company, companies that have leadership teams in the top quartile of gender diversity were 15 percent more likely have financial returns that were above their national industry mean.5 Researchers at the Peterson Institute for International Economics found that for profitable firms, a move from zero to 30 percent female leaders is associated with a 15 percent increase in the net revenue margin.6 Breaking this down further, researchers at Catalyst found that companies with the most women board directors (WBD) outperform those with the fewest WBD on return on sales by 16 percent and on return on invested capital by 26 percent; and companies with sustained high representation of WBD (defined as those with three or more WBD in at least four of five years) significantly outperformed those with sustained low representation by 84 percent on return on sales, by 60 percent on return on invested capital, and by 46 percent on return on equity.7 Likewise, a study by Credit Suisse found that between the beginning of 2012 and June 2014, large companies with market capitalization exceeding $10 billion with at least one women on the board outperformed similar companies with no women on the board by 5 percent on a sector- neutral basis.8 Researchers also found that return on equity of firms with women on their boards is also higher than those without, signaling premium returns, which are then reflected in higher price- to-book values. Furthermore, the proportion of earnings paid out as dividends to shareholders is higher at firms with more than 10 percent of women in their top management as compared to those with fewer women.9 According to McKinsey’s study, more diverse companies are also better able to attract top talent, improve their customer orientation, have higher employee satisfaction, and make more informed decisions, which leads to a virtuous cycle of increasing returns.10 The Peterson Institute found a correlation between the presence of women on boards and the presence of women in executive ranks—a more gender-balanced board may indicate a more balanced executive team.11 Challenges Despite these benefits, numerous obstacles prevent women from advancing through the ranks of senior leadership positions within corporations, including board seats. In the mining and oil and gas industries, for instance, this underrepresentation could be due to a low number of women graduates with degrees in science, technology, engineering, and math.12 Even though women have been outnumbering men at degree-granting colleges since the 1970s.13
  • 9. 9 Other reasons include unconscious bias,14 cultural biases such as stereotyping and the perception that women are less committed to their work, and workplace biases such as the gender pay gap and promotion practices.15 For example, in finance, men and women take entry-level positions in roughly equal numbers, but the number of women shrinks by about half by the middle-management level, leaving fewer female candidates to select for leadership positions.16 Many foreign nations have imposed gender quotas as a solution for overcoming the obstacles to increasing the number of board seats held by women. But the jury is still out as to the effectiveness of quotas. A Credit Suisse study found they can be detrimental. Since 2006, companies in Norway are required to fill at least 40 percent of their board seats with women. According to the report, the organizations that were most affected by this law saw their total firm value (measured as total market value over total asset value) drop by 12 percent for every 10 percent increase in female board members.17 Contrarily, the Peterson Institute found no evidence that board quotas have any significant impact, positive or negative, on company performance.18
  • 10. 10 Every Other One A Status Update on Women on Boards from the Committee for Economic Development CED’s Commitment to Making This Issue a Priority for Businesses To improve progress, CED formed a Women’s Economic Contribution Subcommittee∗ in 2011. This group was composed of 18 prominent women and men from the for-profit and nonprofit sectors and was tasked with studying the issue and making recommendations to increase the representation of women on U.S. corporate boards. In 2012, CED issued a policy statement, Fulfilling the Promise: How More Women on Corporate Boards Would Make America and American Companies More Competitive, which urged companies to expand opportunities for women and make it a top priority to develop the talents and advance the careers of female staff who have been identified as potential leaders. It explained why the gender composition of corporate boards is important for global competitiveness, why existing efforts have not yielded enough progress, and why nominating committees do not do enough to put forward women candidates. The statement calls for more proactive solutions to the supply challenges, including more effective ways to identify and advance talented women. Speakers at the launch of Every Other One at CED’s 2014 Fall Policy Conference: Beth Brooke-Marciniak, Peter Grauer, Barbara Krumsiek, Anne Lim O’Brien, and Gail Becker (left to right). In 2014, CED launched its Every Other One initiative (EOO), which aims to change the behavior of boards and encourage them to replace every other retiring director with a qualified woman. The initiative kicked off with CED’s report Every Other One: More Women on Corporate Boards, which makes the business case for more women on boards; outlines CED’s multiyear plan to have direct outreach to CEOs, board chairs, and board nominating and governance committee chairs of Fortune 1000 companies; and provides recommendations for expanding the criteria of qualified female board members. To coincide with the report’s release, CED sent a letter signed by the Women’s Economic Contribution subcommittee co-chairs to Fortune 1000 nominating and governance committee chairs, describing the importance of increasing the number of women on corporate boards. In addition, the organization hosted a panel at its 2014 Fall Policy Conference on “Women in Corporate Leadership” to inform the public about the launch of Every Other One. CED Members Kathy Hannan, Martha McGarry, and Angela Braly (left to right) provide remarks on the topic of women in leadership at CED’s 2015 Fall Policy Conference. ∗ Originally called the Women’s Economic Empowerment Subcommittee
  • 11. 11 In 2015, CED further promoted the issue by co- hosting a meeting with the Business Roundtable; presenting twice (spring and fall) at The Conference Board Leadership Council on Advancing Women, as well as at The Conference Board Women’s Leadership Conference; presenting at the SAIS Global Conference on Women in the Boardroom; hosting a panel at CED’s 2015 Fall Policy Conference on “Why Women Matter in the Boardroom”; and partnering with the Women’s Forum of New York at the 2015 Breakfast of Corporate Champions. Other work in this area included releasing “More Women on Corporate Boards, A Roadmap for Progress,” which outlines the problem, rationale, and CED’s solution for increased gender diversity on corporate boards. The roadmap was distributed at CED meetings and to board nominating and governance committee members. In addition, CED CEO Steve Odland published the op-ed, “A New Year’s Resolution for the Boardroom,” on CNBC.com in December 2015. During the first half of 2016, CED launched its ambassador program to promote Every Other One via peer-to-peer conversations with Fortune 1000 CEOs and nominating committees at companies whose boards contain less than 20 percent women. (For more information on the ambassador program, please see pages 12 to 15.) The organization also convened a congressional briefing on boardroom gender diversity in March 2016. For a complete list of activities related to Every Other One, see page 17.
  • 12. 12 Every Other One A Status Update on Women on Boards from the Committee for Economic Development The Every Other One Ambassador Initiative: Recent Findings The Every Other One initiative contends that if every other seat vacated by a male board member due to retirement was filled by a woman, while retaining existing female seats, women would occupy nearly a third of board seats in the next five years and ultimately reach parity. CED believes that the fastest way to achieve change is through peer-to-peer conversations among current board members. Since January 2016, CED has recruited 37 senior executives, many of whom are former or current Fortune 1000 CEOs or who have extensive board connections, to serve as ambassadors to engage their peers in discussions on gender parity in the boardroom. These ambassadors have met with CEOs and chairs of board nominating and governance committees at companies whose boards contain less than 20 percent women to discuss the importance and benefits of gender diversity on boards. They have discussed the specific obstacles these boards face in identifying and recruiting female board candidates, and how CED and business leaders can provide resources and help companies identify and recruit board-ready women. Ambassadors raised questions such as: Why do you think your board has so few women? Would you consider adopting the Every Other One approach for your board recruitment? Does the issue of gender diversity come up during board meetings? Can gender diversity and CED’s Every Other One initiative be on the agenda at your next board nominating committee meeting? Are there obstacles in identifying qualified women? What obstacles have you encountered when you have looked for women to join your board? Was adding a woman to the board a priority when considering potential new board candidates? Has the nominating and governance committee succeeded in identifying and electing a woman or women to the board? What resources could CED provide to help overcome these obstacles? Any reactions to the Every Other One approach?
  • 13. 13 What the Ambassadors Learned As of November 2016, 37 ambassadors have held approxi­mately 60 conversations with Fortune 1000 CEOs or chairs of board nominating or governance committees. Since the ambassadors began their outreach, several target companies have reached 20 percent or higher female representation on their boards. While CED does not take full credit for this accomplishment, the organization believes its discussions played a role. Below is a summary of what the ambassadors heard in their conversations. Barriers to adding women Although many companies express interest in expanding board diversity, this interest is not translating into results for a wide range of reasons. • Adding women to boards is top of mind for only a minority of directors. Boards need several members to support adding women for it to become a priority. • The notion of adding a woman can be derailed easily by even one recalcitrant director with comments like, “I think we can do better than that,” or “We should be looking for the best overall athlete.” • Unconscious bias presents a major obstacle. Some men are aware of this bias, but there is often no champion for diversity on the board. • Some all-male boards have discomfort with adding a woman because it changes board dynamics. Some have the same sentiments when adding a second woman to a board. • Some boards experience very little turnover, making it more difficult to bring on women. For example, one ambassador said that there has been only one vacancy in six years on one of his boards and eight years on another. • Smaller companies can have a harder time finding qualified women because their networks for identifying board-ready women are smaller, search firms can be cost-prohibitive, and they are less able to risk having someone who is not a good fit since the board is smaller. • Some companies find it difficult to identify women who meet qualifications of the search. • Board nominating and governance committees define candidate qualifications too narrowly. For example, they make having specific job titles such as CEO or CFO a prerequisite for consideration, instead of looking at specific skill sets. This limits the pool of women candidates since relatively few women have held these positions. Boards often have a hard time accepting that a woman who has not been a CEO can be an effective board member. • Companies that had used search firms felt that the firms kept showing them the “usual” women—those who were often not interested in joining a board outside the Fortune 500, those who already sit on too many boards, or those who were already choosing between multiple board positions. • One ambassador said that her company used a search firm to fill one board position and used recommendations from existing board members to fill another. The search firm was much more successful in nominating female candidates. Relying on the “who you know” method perpetuated the “old boys’ club.” Some boards have a general reluctance to seriously consider candidates that no one on the board knows and therefore can’t personally vouch for. • Many boards consist exclusively of current and former CEOs. The implications of this for gender diversity are unclear. According to one ambassador, many CEOs are used to reaching conclusions quickly and stating them authoritatively, which often shuts down further comment and discussion. On the other hand, another ambassador said that when former CEOs speak up about the benefits of board diversity, other board members are more likely to listen. • Boards tend to identify gaps in the board’s expertise first and then add other desired characteristics, like gender, as secondary goals.
  • 14. 14 Every Other One A Status Update on Women on Boards from the Committee for Economic Development Things are improving—slowly Companies that make board diversity a priority have made progress in adding more women to their boards. • Some boards already have substantial represen- tation by women. One Fortune 500 company has had at least 50 percent female board repre- sentation for many years because the company understands that its customers are primarily women. A number of other companies have been adding women recently because they recognize that women drive 70 to 80 percent of consumer spending in the United States through buying power and influence.19 • Most of the women added to boards in recent years have been elected to seats previously held by men who have retired. • One board, which recently has added three additional women to the two existing women directors, has a stated objective to continue adding more women. • Another board has achieved 40 to 50 percent female representation over the past nine years. The ambassador said there were no obstacles in identifying qualified women once the board made it a priority, and that it eventually had more candidates than it had open slots. • Some boards are beginning to look outside the United States for qualified women. How business advocates can help Business leaders need to take the initiative to increase the number of women on boards. CED’s ambassadors outline the following steps that business leaders can take: • Create open, credible databases of board-ready women. Women interested in joining a board could register and post their resumes in a central location that other companies, including the smallest ones, could access. Candidates in the databases could be endorsed by current board members. • Celebrate boards with more than 30 percent women (see table below). Celebrating Champions of Boardroom Gender Diversity Top 10 F1000 boardroom diversity champions by percentage change of female directors, 2009–2014 Top 10 F1000 boardroom diversity champions by percentage of female directors, 2009–2014 Company 2009 2014 Percent change Company Percent female Dollar General 0.0% 37.5% 37.5% Avon Products Inc. 66.7% Big Lots! 11.1 44.4 33.3 Navient Corporation 53.9 Netflix 0.0 33.3 33.3 WhiteWave Foods 50.0 GAP Inc. 0.0 30.0 30.0 Ulta Beauty 50.0 Pinnacle Entertainment 0.0 28.6 28.6 Ann Inc. 50.0 Abbott Laboratories 8.3 36.4 28.0 Estée Lauder Companies 46.7 Ulta Beauty 22.2 50.0 27.8 Macy's 46.2 Realogy 16.7 44.4 27.8 Procter Gamble Co. 45.5 General Dynamics 0.0 27.3 27.3 Alaska Air Group 45.5 The Hartford 11.1 36.4 25.3 Levi Strauss Co. 45.5 Source: “The Changing Face of Fortune 1000 Boardrooms, in Five Charts,” Equilar, October 6, 2015, www.equilar.com/blogs/48-the-changing-face-of-fortune-1000-boardrooms.html.
  • 15. 15 • Look beyond CEOs and CFOs as the only qualified pool of people to include on a board. Other candidates to consider include academics (faculty and senior leadership); entrepreneurs; nonprofit and public-sector executives; retired senior attorneys; retired accounting partners; investment bankers and money managers; risk management, compliance, and governance officers; divisional presidents; management consultants; and women with broad executive and management experience, including PL experience. One ambassador suggested reaching as far into an organization as middle management to expand the pipeline of board-ready women. • Institute methods to refresh boards, such as through term limits, age limits, and rotating out underperforming directors. (Term limits would be more difficult to manage because it often takes a new director two to three years to get fully involved, said one ambassador.) • For investors: ask why there are so few women on boards of the companies they are investing in. • Convey to boards and nominating committees the competitive advantage that having women’s perspectives on boards provides. • Clearly define the skills that the company will need to implement future growth strategies and fill those gaps on the current board. • Encourage current directors and senior management to develop their own pipeline of qualified female board candidates. • Require search firms to present a broad pool of women candidates. • Ask search firms for their input regarding the types of expertise boards might find valuable. • Have at least two women on every slate. Research shows that having only one woman on a slate virtually guarantees that no women will be selected. But when there are at least two women on a slate, the chance that a woman is selected increases to 50 percent.20 How CED can help The ambassadors also had suggestions on actions CED should take. They include: • Provide thought leadership relating to broader qualifications for potential board candidates. • Provide information regarding the benefits of broader board diversity and non-CEO board members. Highlight how such board members could enhance the depth and scope of discussion about issues facing the board. • Partner with other business organizations to determine how they could work together to increase gender diversity on corporate boards. • Pool existing resources that boards could tap when seeking board members. For example, each CED member could provide names of two board-ready women to create a candidate pool for companies seeking board members. • Strongly encourage search firms to commit to bringing more diverse slates to every search. One ambassador said the search firms tend to use the same group of people for every search without doing the necessary work to find a more diverse slate.
  • 16. 16 Every Other One A Status Update on Women on Boards from the Committee for Economic Development Next Steps for the Every Other One Initiative Every Other One grew out of the premise that business is essential for American prosperity and that corporate boards are responsible for driving long-term value. As research shows, more diverse boards are better equipped to navigate the complex and dynamic issues that companies now face.21 Yet women remain underrepresented in corporate boardrooms—despite making up more than half of the workforce. This underrepresentation has been shown to result in negative consequences for corporations’ bottom lines and for our nation’s ability to compete globally. For years, the argument has been made that, as they increasingly participate in the workforce, women will eventually make their way into top company leadership positions, including boardrooms. However, it’s become apparent that the problem won’t fix itself. Women accounted for 26.9 percent of new directorships at SP 500 companies in 2015.22 At this rate of progress, it will take decades to reach parity. Instead, the business community should seize this opportunity to show meaningful leadership and foresight on an issue of national importance. Moving forward, CED plans to expand its ambassador program and continue conversations on the importance of boardroom diversity. CED also plans to advance this issue by partnering with other public-policy groups and business-sector organizations, as needed. Ultimately, CED hopes that these actions will help make the case for the advancement of women on corporate boards. CED still is seeking qualified executives to serve as ambassadors. If you would like to be involved or know someone else who you might be interested, please contact CED’s Executive Vice President, Michael Petro, at mpetro@ced.org. CED also provides resources on its website for finding qualified female directors. These resources can also be found on page 18.
  • 17. 17 APPENDIX Summary of Activities to Date 2014 • Launch Event Panel hosted by CED at 2014 Fall Policy Conference “Women in Corporate Leadership.” Speakers included Mike Petro, Beth Brooke-Marciniak, Gail Becker, Peter Grauer, Barbara Krumsiek, and Kathleen McLaughlin (November) 2015 • CED and Business Roundtable co-host meeting with John Cridland, CEO of CBI, and UK Ambassador to the US Peter Westmacott (March) • CED and Susan Ness present before The Conference Board Leadership Council on Advancing Women (April) • Madeleine Condit and Janice Ellig present before The Conference Board Women’s Leadership Conference (June) • CED unveils the infographic “More Women on Corporate Boards, A Roadmap for Progress,” outlining the problem, the rationale, and the CED solution for increased gender diversity www.ced.org/pdf/CED_Toolkit_on_Gender_ Diversity.pdf (September) • CED presents at the SAIS Global Conference on Women in the Boardroom (September) • Panel hosted by CED at 2015 Fall Policy Conference, “Why Women Matter in the Boardroom.” Participants included CED Members Larraine Segil, Angela Braly, Kathy Hannan, Martha McGarry, Jane Stevenson, Linda Chen, and Congressman Don Beyer (D-VA) (October) • CED partners with the Women’s Forum of New York at the 2015 Breakfast of Corporate Champions (November) • CED presents before The Conference Board Leadership Council on Advancing Women (November) • Steve Odland authors op-ed on CNBC, “A New Year’s Resolution for the Boardroom,” www.cnbc.com/2015/12/22/getting-more-women- on-boards-commentary.html (December) 2016 • CED engages 37 “Ambassadors” to promote Every Other One via peer-to-peer conversations with Fortune 1000 CEOs and nominating committees, focusing on companies with less than 20 percent board gender diversity (January) • CED convenes a congressional briefing, featuring CED Members Madeleine Condit and Diana Solash, on boardroom gender diversity (March)
  • 18. 18 Every Other One A Status Update on Women on Boards from the Committee for Economic Development APPENDIX Resources to Find Qualified Women Directors Equilar BoardEdge equilar.com/boardedge-issuers.html Women’s Forum of New York womensforumny.org Catalyst catalyst.org Direct Women directwomen.org Financial Women’s Association fwa.org National Association of Corporate Directors nacdonline.org The Boston Club thebostonclub.com Women Corporate Directors womencorporatedirectors.com
  • 19. 19 Endnotes 1 Nolan Feeney, “Women Are Now More Likely to Have a College Degree Than Men,” Time.com, October 7, 2015, http://time.com/4064665/women-college-degree/. 2 Financial concerns of women, BMO Wealth Institute, March 2015, p. 2, www.bmo.com/privatebank/pdf/Q1- 2015-Wealth-Institute-Report-Financial-Concerns-of- Women.pdf. 3 Mark J. Perry, “Stunning college degree gap: Women have earned almost 10 million more college degrees than men since 1982,” AEIdeas blog, May 13, 2013, www.aei.org/publication/stunning-college-degree- gap-women-have-earned-almost-10-million-more- college-degrees-than-men-since-1982/; Women in the labor force: a databook, U.S. Bureau of Labor Statistics, Report 1059, December 2015, www.bls.gov/opub/ reports/womens-databook/archive/women-in-the-labor- force-a-databook-2015.pdf; and Boardroom Diversity: When Women Lead, 2020 Women on Boards, p. 2, 2016, www.2020wob.com/sites/default/files/2020GDI- 2016Report.pdf 4 Women on Boards Gender Diversity Index: 2011-2015 Progress of Women Corporate Directors by Company Size, State and Sector, 2020 Women on Boards, 4, 2015, www.2020wob.com/sites/default/files/2020GDI- 2015Report.pdf. 5 Vivian Hunt, Dennis Layton, and Sara Prince, Diversity Matters, McKinsey Company, February 2, 2015, p. 1 (available at www.diversitas.co.nz/Portals/25/Docs/ Diversity%20Matters.pdf ). 6 Marcus Noland, Tyler Moran, and Barbara Kotschwar, Is Gender Diversity Profitable? Evidence from a Global Survey, Peterson Institute for International Economics, Working Paper 16-3, February 2016, p. 16, https://piie. com/publications/working-papers/gender-diversity- profitable-evidence-global-survey. 7 Nancy M. Carter and Harvey M. Wagner, “The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004–2008), Catalyst, 2011, p. 1, www.catalyst.org/knowledge/bottom-line- corporate-performance-and-womens-representation- boards-20042008. 8 Dorothee Enskog, “Women’s Positive Impact on Corporate Performance,” Credit Suisse, September 23, 2014, p. 2, www.credit-suisse.com/us/en/articles/articles/ news-and-expertise/2014/09/en/womens-impact-on- corporate-performance-letting-the-data-speak.html. 9 Credit Suisse, p. 3. 10 McKinsey, p. 1. 11 Peterson Institute, p. 9. 12 Credit Suisse, p. 5. 13 Matt Rocheleau, “On Campus, Women Outnumber Men More Than Ever,” Boston Globe, March 28, 2016, www.bostonglobe.com/metro/2016/03/28/look-how- women-outnumber-men-college-campuses-nationwide/ YROqwfCPSlKPtSMAzpWloK/story.html. 14 McKinsey, p. 1. 15 Credit Suisse, p. 5. 16 Peterson Institute, p. 5. 17 Credit Suisse, p. 4. 18 Peterson Institute, p. 7. 19 Michael J. Silverstein, Kate Sayre, and John Butman, Women Want More: How to Capture Your Share of the World’s Largest, Fastest-Growing Market (New York: HarperBusiness, 2009), www.catalyst.org/system/files/ buying_power_0.pdf. 20 Stephanie K. Johnson, David R. Hekman, and Elsa T. Chan, “If There Is Only One Woman in Your Candidate Pool, There’s Statistically No Chance She’ll Be Hired,” Harvard Business Review, April 26, 2016, https:// hbr.org/2016/04/if-theres-only-one-woman-in-your- candidate-pool-theres-statistically-no-chance-shell-be- hired. 21 “Different Is Better: Why Diversity Matters in the Boardroom,” Russell Reynolds Associates, www.russellreynolds.com/en/Insights/thought- leadership/Documents/different-is-better_0.pdf. 22 Catalyst Census: Women and Men Board Directors, Catalyst, 2016, www.catalyst.org/system/files/2015_ catalyst_census_final.pdf.
  • 20. Every Other One A Status Update on Women on Boards from the Committee for Economic Development November 2016 Committee For Economic Development of The Conference Board 1530 Wilson Blvd Suite 400 Arlington, VA 22209 202.296.5860 www.ced.org