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The Barriers of the Boardroom
As the glass ceiling finally cracks, what's preventing women from entering the boardroom?
by Drew Ermenc
December 17, 2007
T
he 21st century's version of the glass ceiling is the boardroom barrier, a phrase coined
to describe the difficulty of women to be either nominated for a board position at a public company
or for a C-level executive position. A recent study showed that, out of 1,435 directors on boards
across the 175 Georgia public companies surveyed, only 106 of these directors, or 7.4 percent, were
women. With women accounting for a significant percentage of employees in the high-paying
managerial and professional work force, why is this discrepancy still so drastic?
Kelly Gay, chairman, president and CEO of KnowledgeStorm and president of the Board of
Directors Network, a not-for-profit organization that sponsored the annual study, believes several
factors contribute to the low numbers of women in the boardroom. "Change takes time," she says.
"Five, 10, 15 years ago, boards weren't made up of a preponderant number of women. Companies aren't
going to make a wholesale change ¬– up to 50 percent – of the board. It's going to take longer
because you're almost going person by person."
She believes that although statistics show that women make up nearly half of the work force,
they don't account for half of the leadership roles in public companies. "It will be a long time
for half of the board members to be women because the pool they are pulling from is not half. The
pool that someone would pull from is still not representative of the work force as a whole."
The latest findings from the Women in the Boardroom study found a nominal improvement over
the past year, with female directors making up 7.6 percent of the total boards seats in Georgia,
versus 6.7 percent in 2006. Gay sees this as encouraging news. "Keep in mind, Georgia started
behind," she says. "We are actually gaining ground as a state, but we've in the back of the pack,
and certain states are further along." She adds, "It's a gain, but there's still a long way to go."
The Next Step
"I think women have risen pretty dramatically in corporate America," says Joel Koblentz, a
senior partner with The Koblentz Group, a senior level executive search firm based in Atlanta. "But
the issue now becomes how you take the next step."
Koblentz, who during his career has filled about 300 board of director positions for various
clients, has noticed several trends that result in a lower number of women in the boardroom. "Some
women – and men – have shown no interest in board service," he says. "But that's a part of our
society now – this balanced lifestyle. As women have risen up, some women and men don't find board
service that appealing. There's a high commitment, a high liability, and the compensation isn't
that great."
He cites an example of a client who was recently searching for a new board member.
Koblentz's company came up with 10 candidates, seven of whom were women. "Two of the three final
candidates turned us down because they said they don't have time," he recalls. "I don't think it's
a woman versus man thing, it's the demands of professional life."
He adds, "Even though more women who have risen in the senior ranks are qualified for board
service, many of them just don't have the time. We're looking for the best qualified person to help
that board, and in many cases, they are women ¬– yet they can't do it."
He says that diversity drives corporate boards these days, but not necessarily the diversity
that you may think. Boards, he says, look for "diversity of thought, diversity of experience,
diversity of purview, and diversity of race and gender. Experience drives value. The stronger the
governance team of the company, the more likely it is that that company will exceed the average
value of those in its sector in terms of market cap. The better the governance, the more your
company is worth."
Koblentz believes favoritism is not a factor during the search for director candidates. "If
there's prejudice that holds women back by the decision makers of these board nominations
committees, frankly, I haven't seen it," he says. "I know the statistics argue different. As women
are rising into more prominent roles, they're going to have the same demands that the men have."
Although Gay doesn't necessarily argue that there's gender bias during the board selection
process, she does understand the influence and power of networks. "When a director position becomes
available, people turn to the network they know," she says. "When you are in the network that runs
together, you're just going to know the position is available; you're going to be there as a ready
candidate, quicker than someone who's not in that network." Because men make up the majority of
director positions, she argues, this could lead to a disproportionate number of male candidates.
Asked if there's still a "good old boy" network, she says, "Absolutely, there is, but the
corollary is that there's a wonderful ‘good old girl' network, too. The ‘boy' network is the most
powerful as other networks are outmanned from a sheer volume standpoint ... but we're all
continuing to grow."
Corporate Governance
According to Koblentz, the passing of the Sarbanes-Oxley Act, a 2002 law that was designed
to protect investors from corporate malfeasance, has severely affected the way boards handle the
nomination process. "Before Sarbanes-Oxley, the average CEO was sitting on three-and-a-half boards
other than his or her own," he explains. "It gave [that CEO] the opportunity to learn about
different processes, ideas, businesses, and establish connections that would benefit the [CEO's]
company.
Koblentz believes Sarbanes-Oxley has added significantly more responsibility to board
positions. "With Sarbanes-Oxley, the pressure has been on transparency in every aspect of corporate
governance and, by the very definition, requires that independent board members will spend an
increasing amount of time on corporate governance. Now, board members spend on average 200 to 250
hours a year. That doesn't include unusual circumstances, such as SEC investigations, acquisitions,
divestments, mergers; any of these things requires considerably more time."
The time factor works against both employee and employer, and some companies just aren't
willing to share their top executives. "It's about time commitment," he says. "Many women have
risen to critical roles in their company, and they have management that doesn't want them – or
anyone else – to go sit on other boards. You can't afford to have key people running around." This
limitation puts an added strain on high-level executive and boardroom recruiters like Koblentz.
"With less interest in board positions, I can tell you we've had to talk to more candidates than
ever before because of the number of turndowns," he says. "That's what we're seeing."
A Culture Of Change
Public companies are striving more than ever to find ways to locate and accelerate
leadership prospects in their circles. Frank McCloskey, vice president of diversity and corporate
relations for Georgia Power, finds the challenge broader than just revamping basic hiring
principles.
"The more we can change leadership and culture, then that is the barrier we have to continue
to work on; that's corporate American's challenge, and that is what creates sustainability," he
says. "I can have a momentary increase in representation, but if I don't change leadership's
effectiveness and culture, then it becomes a revolving door. The culture is going to filter out
what it's not comfortable with."
McCloskey finds the challenge of overcoming management's "comfort zone" one of his top
priorities. The more that we can get management and an organization's culture comfortable to those
who are different, the better," he says. "And those who have traditionally been in leadership –
let's be specific, white men – the more we can expand leadership capability to manage across race,
gender and ethnicity.
He's implementing a set of initiatives to improve management skills, from how to manage
conflict to communication abilities, to finding high potentials. "As a part of management skills,
we're trying to do a better job of teaching a ‘here's why' for decisions and behavior, and how to
give and receive feedback," he says.
McCloskey considers it essential to foster managers who can give and receive feedback
regularly because "that's exactly what women are looking for in a corporate environment, a ‘How can
I do better?' mentality. In doing that, the outcome is that you have employees who are getting
feedback and are getting better and have a more holistic understanding of performance management.
You have to have that in order to be successful in a culture."
"It's all about being able to manage across those differences," he says, citing Georgia
Power's mentoring programs, affinity groups, informal networks and support systems. "We're trying
to expand leadership and culture for women to be successful."
