Saturday, January 20, 2007

 

May Women Soon Cease to Think of Themselves As A Minority

“May women soon cease to think of themselves as a minority” is the email that Dame Stephanie Shirley sent to me when she heard I was working to prepare women to serve on corporate boards of directors. Dame Shirley in 1962 founded the British firm, F-International, now Xansa, as a business technology consultancy.

“In 25 years as its Chief Executive she developed it into a leading business technology group, pioneering new work practices and changing the position of professional women (especially in hi-tech) along the way.” (www.steveshirley.com)

Her message to me was this: seek out women who thought, as she did, as if they already had equal access to equal opportunity. “You achieve the goal you aim at.” If you aim at failure you will achieve it. Like the senior member of the Flying Wallenda Family, once he started to focus on the ground rather than the high-wire, he literally hit his target.

We all have heard that women currently hold “only” something like 15% of the board of director seats at Fortune 500 listed public companies. And we know that women have been added to corporate boards “only” at a rate of one-half of one percent a year for the past decade (1995 to 2005).

Does it follow that the only way women will make progress is if the men on those boards institute “gender entitlement” programs or quotas to raise the share of women directors on large corporate boards? Isn’t that “thinking like a minority?” Doesn’t thinking like a minority prepare one to maintain a minority mentality?

The “entitlement” approach won’t work anymore if there is anything to be learned from our previous experience with all of the “other diversity entitlement” efforts that have gone before. Like it or not, the age of “affirmative action” has been initiated out of existence along with the Equal Rights Amendment.

In 1996, Ward Connerly led a successful anti-affirmative action campaign, winning passage of Proposition 209 in California to bar racial, gender or other preferences by any publicly-subsidized state agency or institution. A similar ballot measure passed in the state of Washington two years later. Florida unilaterally enacted a similar anti-entitlement program when facing the prospect of a ballot initiative there in 2000. This past year, Michigan passed its own Civil Rights Initiative, to “ban public institutions from using affirmative-action programs that give preferential treatment to groups or individuals based on their race, gender, color, ethnicity or national origin for public employment, education or contracting purposes.” Connerly is preparing to take similar ballot initiatives forward in nine other states: Arizona, Colorado, Missouri, Nebraska, Nevada, Oregon, South Dakota, Utah and Wyoming.

Again, like it or not, this IS becoming the law of the land. Are we really convinced that an appropriate strategy, now, is to try to insist on undoing the initiatives of the past decade?

Once we start to expect that some vested interests are entitled to special treatment, even on boards of directors, there can be no end to those who will also insist on some theoretic fair share of the entitlement pie. I mean, how many Black, Mexican-American, Gay, Lesbian, Transsexual board members does a corporation really need? Rightfully, other groups demand greater shares of director seats once we start allocating board seats on the basis of some sampling called “diversity,” rather than on the basis of skills and experiences which the boards actually need to do their job.

Boards do not excel simply because “differences exist.” They excel when they attract competence, first and foremost, in the critical areas of expertise where the company faces risks and challenges. Boards excel when experience is combined with independence of thought; when the board overall performs well as a group and when the skills and styles mesh, and are strategically driven by worthy corporate goals.

In the post-Sarbanes-Oxley world, boards have reflected these challenges not simply by adding “diversity quotas,” but rather by pruning the tree. Boards have cut out the fat; retired ineffective directors; reduced their overall size; cut back on their tendency to hire only white male CEOs; brought in more independent executives not beholden to the CEO; and instituted more effective oversight and direct ownership of financial, legal and technology responsibilities by directors.

Boards have cut their average size to just over 11 members (from 1995 to 2005), eliminating 645 seats at the Fortune 500 level. During that period, some female directors also retired and were retired. Overall, however, women ADDED 227 female occupied board seats to the top listed Fortune 500 firms. This contrasts with male directors who lost 827 seats.

Since the passage of Sarbanes-Oxley, boards have become much more “transparent” in their annual proxy statements especially about their directors’ backgrounds and where they found them. Director nominations occur throughout the year, and then are voted upon at the annual meeting. Today, the press releases about director nominees, their qualifications and experience are more publicly available and more highly scrutinized than ever before.

NewsOnWomen.com has been tracking women on board press releases since July 2005. Alice Krause, owner of NewsOnWomen.com, now reports female director nominations, the state where the company is located, the exchange listing and the industry sector.

In contrast to the1995-2005 average of 75 women A YEAR added to the Fortune 500 firms’ boards of directors, we are now seeing 25 to 30 women A MONTH added at firms of all sizes across the nation.

In 2006, 53% of the female directors were named to firms located in just 7 states. California led all other states with 16% of all the newly announced female directors per NewsOnWomen.com, and 35 of the 50 states had companies naming women to their boards during the year.

In 2004 and 2005, surveys of the California’s Fortune 1000 boards of directors showed that women and companies were about evenly divided between Northern and Southern California locations. In 2006, NewsOnWomen.com reported many more women from Northern than from Southern California firms. And more firms were reporting from the sub-1000 size category, representing smaller, emerging-technology and –science companies.

Perhaps, at one time, women believed the argument that they were “a minority” that needed preferential or entitlement treatment. They supported that position because they believed it would win them the opportunities they believed they could not otherwise garner.

Today, that belief and that argument go against the tide of reality which is that women are advancing to top corporate, executive, and board-level positions on the merits, on the basis of their competence, their skills and experience. They are doing so in record numbers. These women think of themselves as a peer to anyone competing in the same marketplace; they see themselves as equals. Dame Shirley would be proud.

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