“Catalyst
research shows
that companies
with more
women on
their boards,
on average,
financially
outperform
those with fewer.
And companies
with three or
more women on
their boards do
even better.”
a senior mergers and acquisitions part-
ner in Reed Smith’s Philadelphia and
New York offices. “If you love business
and the challenges of overseeing man-
agement, developing new strategies
and serving the sometimes conflicting
interests of the important stakeholders
in a company, you will enjoy serving as
an outside director.”
But can women and minorities take
advantage of the opportunity?
According to the 2009 Catalyst
Census of the Fortune 500, women held
15. 2 percent of board seats, a number
that reflects little growth over the past
five years. Women of color held 3. 1 percent, compared with 3. 2 percent in
2008. Almost 90 percent of the Fortune
500 had at least one woman director,
but less than 20 percent had three or
more. Women’s share of board chair
positions remained flat at 2 percent.
Ilene Lang, president and CEO
of Catalyst, is not overly optimistic.
After the Sarbanes–Oxley Act, which
tightened board standards and rules,
“we saw that retired male CEOs were
tapped in greater numbers to make
up for the shortfall of sitting CEOs
participating in the boardroom,” Lang
says. “Boards can, however, seize the
opportunity to diversify and appoint
qualified women and minorities. Cata-
lyst research shows that companies
with more women on their boards, on
average, financially outperform those
with fewer. And companies with three
or more women on their boards do
even better.”
She adds that the Securities and
Exchange Commission has recognized
the need to diversify corporate boards,
reflected in its recent ruling that com-
panies disclose their diversity policies.
Similarly, a study last year of black
members of boards of directors of Fortune 500 companies, commissioned by
the Executive Leadership Council, found
that the number of board seats held by
them has declined since its inaugural
board report was released in 2004. Four
years ago, they held 449 corporate board
seats; today, they hold 413, or 36 fewer.
“I am a public company CFO. I should
be a prime candidate with search firms,”
Linda Bolliger, founder of Board-
room Bound, a nonprofit that helps
companies find prequalified director
candidates, says some of the Fortune
500 CEOs she’s been talking to are
ready to go beyond the traditional old
boys’ network.
“Some of them understand that a
homogenous monoculture of the elite
at a time when we are in global economy
is not taking advantage of the talent
pool,” she notes.
So if the door is open a crack, what’s
most needed for women and minorities
to step right in?
Companies are looking for a variety of
skills, and much depends on the type of
company. Factors include a company’s
size, products, markets, employee composition, issues complexity, and strategy going forward.
“The preference is still a sitting
CEO or COO,” says Janice Reals Ellig,
co-CEO of Chadick Ellig, an executive
search advisory firm. “But lately there
is more emphasis on recruiting CFOs,
because of the risk management issues
C-suite executives who had a demon-
strated track record are also high on
the list.” Truthfully though, “comfort is
the key factor. Boards are like any other
group and want to bring on people they
know and [who] will work well with
the board as a whole. CEOs know other
CEOs and want those who have faced
some of the same issues.”
There certainly are boards looking for
strong information technology, market-
ing or human resources backgrounds,
but most companies look for board
members with strong financial leader-
ship or operating success and global
experience, says David Nosal, CEO of
executive search firm Nosal Partners.
Quite frankly, says Shecter, “we
are long past the time that being a
friend of the chairman or CEO is the
only credential one needs to serve as a
director. In fact, the SEC now requires
a company, in its proxy statements, to
identify not only the background of
each director but the specific skills that
a director has that contributes to the
functioning of the board.”
