Do Corporate Boards Have A Feminine Touch?

There's opportunity aplenty for women to be on corporate boards. Visibility is key to being asked to serve.

by Carol Carter

April 27, 2007

M ost public companies in Georgia and the nation continue to choose white men as members of their boards of directors, according to two just-released reports, but near-future opportunities for female board representation looks brighter. It isn't that companies aren't looking for women to serve, says Joel M. Koblentz, whose executive search firm has filled nearly 300 boardroom seats. Rather, it's that companies today seek specific competencies in board members, and the need and desire for those competencies outweigh choices involving diversity – though diversity, he says, remains important. Koblentz, senior managing partner of Morgan Howard, suggests that women who would like to serve on a board make themselves more visible.

Kelly Gay, president of the Douglasville organization that released one of the reports, says much the same thing. "You have to be visible. You have to be known. You have to put yourself in environments where people in power see you in a business format. Visibility is absolutely critical." Gay's organization, the Douglasville-based Board of Directors Network, revealed in its report, "Momentum! A Must!," that in 2006, women held 6.7 percent (101) of the 1,509 total board seats in Georgia's public companies. This was down from 7.1 percent in 2005, and 7.3 percent in 2004. On a somewhat positive note, the "Momentum!" report showed that 47 percent of Georgia's 178 public companies had one or more women on their boards, up from 46 percent in 2005, but down from 49 percent in 2004. The Board of Directors Network is one of eight regional organizations that make up the InterOrganization Network (ION), which also just released its national report about women serving on boards. The "Missed Opportunities" study shows that in the seven of eight regions where board turnover was analyzed, 539 new independent directors were elected, and only 92 — or 17 percent — were women.

"The ION report reflects what is happening in the boardrooms of public companies across the country," says ION president Toni Wolfman.

"There are ample board openings available for women and a pool of accomplished women interested in board service. What is missing on the part of corporate leaders is the effort to make the connections necessary to take advantage of these opportunities and bring thereby bring about meaningful change." From where Koblentz sits, that's not exactly why women are coming up short on board appointments. It has more to do, he says, with the current corporate environment. "Boards and nominating committees are under so much pressure to find people who can actually act as a check and balance to management, make the right decisions, be totally transparent with the shareholders and add value to the share price, in addition to being compliant with the Securities & Exchange Commission. So they look for specific kinds of people."

As an example, Koblentz says he recently helped a large retailer that was beginning to buy goods from Asia. This created a huge logistical problem. In addition to that, a large portion of the retailer's customer base is black and Hispanic. "So we looked for a director who understood logistics, who was Hispanic and who had the leadership qualities that would be helpful to the company," he says. "We found it, but it happened to be a man, not a woman."

Women can make themselves visible for board consideration, Koblentz says, by making presentations at investor conferences, raising their visibility at association functions, writing articles on their areas of expertise and being interviewed. On top of that, Gay says, "You have to strive for excellence in your profession. Make a determination to differentiate yourself, just like anybody else who sits on a board."

There is a huge demand for women directors, according to Bernard van der Lande, senior managing consultant in Atlanta with Harvard Group International, a retained executive search firm. "If you look at the composition of the average board, it's more male. But it's not because companies are not trying. It's just that people don't always know who is interested." Van der Lande is happy for women who want to be considered for board seats to contact him. What does Van der Lande look for when nominating someone to serve on a board? Authenticity. "I look for people who have had their ups and downs and understand the total picture. I don't think you can be a best-in-class leader if you don't have authenticity."

The Board of Directors Network report stresses that diversity broadens the knowledge of any board of directors. "There is no value," Gay says, "in having some number of people on your board who think the same way. That means you have only one view. One opinion. One image. It doesn't matter if that one opinion comes in the form of one person or 20. If you all have the same view, you've still got one opinion. Diversity lets you broaden both the ideas that are brought to the company, the creativity and the viewpoint. Diversity lets you have a stronger company because you are representing so many more views. And in doing so, you are connected with and touching a broader audience, which is your customers."

The coming year may present plenty of opportunities for women to be appointed to boards. Koblentz predicts this next year will bring more board turnover than ever before. Why? "The work is hard, terms expire, and compensation is relatively modest. Liability is high and pressure is enormous. When you add all of that up, it creates great opportunity for those who are well-positioned to sit on boards, have competency in a function or a market and have shown leadership."

While those survey facts sound disappointing, it does mean, on the other hand, that opportunity abounds for women. And for women who do secure board seats, Gay says, "It makes you step up to a plate and do things you may not have thought you were capable of doing. Being on a board, for anybody, causes you to step into your intelligence, your ability to succeed. It causes you to perform at a level that you wouldn't be performing at if your weren't on the board simply because of the experience of having to contribute."

Companies without female representation on their boards might consider this fact noted in the Board of Directors Network report: Among Fortune 500 companies, those with the best record of promoting women to senior executive roles and selecting women directors were more profitable than those that did not.

Maybe that says it all.