Despite dismal growth in the number of women in leadership in Michigan’s top public companies, Terry Barclay, president and CEO of Inforum and Inforum Center for Leadership, said she feels optimistic the coming years will bring significant change.
“Women’s Leadership in Michigan Top Public Companies,” which was released recently and looked at the past 10 years, found “a less than two percentage point increase in women’s representation in the boardrooms and executive suites of Michigan companies over the course of a decade.”
The study was conducted through a partnership between Inforum Center for Leadership and Wayne State University’s School of Business Administration.
The study found that women hold only 11.5 percent of the 850 board seats in Michigan’s 100 top public companies. That is actually an increase from 2011 when they held 10.4 percent of board seats. Only 12.6 percent of executive officers of those companies are women, which is down from 13.3 percent in 2011.
Barclay notes in her introduction to the report: “At 16 Fortune 500 companies headquartered in Michigan, 17.4 percent of board members are women, slightly down from 18 percent in 2011, when Michigan was headquarters to two additional Fortune 500 companies. At these companies, 10.6 percent of executive officers today are women, down from 14.8 in 2011. And, among the 87 highest compensated officers at these firms, three are women, whereas in 2011, there were four.”
Some other statistics include:
- Men hold 88 percent (752 of 850) of board seats at the top 100 public companies.
- At the current pace, it would take 170 years to achieve gender balance in Michigan’s boardrooms.
- Forty women are among the 417 top compensated officers in Michigan’s 100 largest public companies, or 9.6 percent.
- There has been a 75 percent loss in the number of women of color executive officers since 2007.
Despite the discouraging statistics, Barclay said her optimism comes from companies that are doing well in appointing women to top positions, including Steelcase.
“They have two of five top compensated (officers), so 40 percent of their top compensated leaders are women, which is a good thing,” agreed Toni Somers, chair of the department of management and information systems at Wayne State University.
Barclay added, “I know that some of those top women serve on the boards of other companies, so there is a culture there where that is acceptable and that is one of the things that we are recommending other companies do, so they are a role model in that regard, as well.”
She said that, moving forward, companies encouraging their top female executives to join the boards of other companies is going to be vital to women making gains in the public sector.
“There are women who are top executives at the Fortune 500 companies who are running divisions or aspects of those companies that alone are bigger than some of the tier three companies in this study, and so there is a wealth of opportunity,” Barclay said. “When you look at the boards of those companies, they are actually less diverse than the Fortune 500 boards.
“If CEOs will free up women and help position them to serve on those boards, we could have a quick transformation in these numbers. That is one of the reasons we have been delighted to see some CEOs, like Dan Ackerson at General Motors, (where) two of his top women are serving on other Fortune 500 boards.”
While the study didn’t look at the reasons behind the numbers, Barclay and Somers were in agreement on several factors that might be contributing to the slow growth. They point to unconscious bias in the talent review process, which is basically that people are attracted to those who are like them.
“We need to have processes within the talent review process to ensure that people who aren’t like us also are positioned for opportunities to be assigned to the high-profile accounts, or be positioned for the right next step to prepare you for a promotion. That way we can ensure that we’ve got that pipeline filled with talent,” Barclay said.
There is also a surprising difference in the age ranges of women board members and male board members.
“Women directors ranged in age from 44 to 53, whereas male directors ranged in age from 39 to 72 — a 33-year age span versus a nine-year age span for women, which suggests that, when you look at turnover, there is a wider net being cast for male directors,” Barclay said.
Somers added, “They are giving younger males more of an opportunity than they are giving younger females. That is kind of disconcerting for us here as educators. When we educate our MBA students who aspire to be leaders some day of these major corporations, currently they don’t see the opportunities there.”
Studies have shown that gender diversity is good for a company’s bottom line.
“There have been a number of studies that show companies do better when they have a critical mass of women on boards,” Somers said. “Research indicates when the percentage of women increases, women tend to stick together. They form coalitions and support one another and that really affects the culture of the group, and with that, I think, comes this increase in performance measures.
“In particular, performance measures that have been studied are things like return on sales, return on investment and return on equity. Looking at boards of directors with no women versus looking at boards of directors with three or more (women), there is a very striking difference in those performance measures.”
Both Barclay and Somers hope the study results will push companies to develop a more diverse talent pipeline and position their female leaders for more opportunities.
“I am more optimistic than I have been in past years,” Barclay said. “I think that these issues are starting to be more visible. We are starting to talk about them more.
“We are starting to recognize that they are economic issues. It’s not about fairness or being politically correct. I think there is growing recognition in companies that this kind of diversity is an economic issue for the company.”