For the most part, America’s largest companies agree that they need more gender diversity on their boards of directors. Even those who question the bottom-line value of diversity can recognize that having more women in leadership improves a company’s public image and offers a perspective that can help them better serve their female stakeholders and customers. While corporate America has made some progress toward bringing more women into the C-suite, gender parity in corporate leadership is still a distant vision. On boards of directors, women’s representation also remains low, with some major companies having not one woman on their board.
Furthermore, getting a seat at the boardroom table is only half the battle for women’s inclusion, as Kimberly A. Whitler and Deborah A. Henrietta discuss at the MIT Sloan Management Review. According to their research, more is needed for women directors to have a real impact on corporate governance.
There are three levels to progress for women on boards, Former Xerox Corp. CEO Anne Mulcahy tells the authors: breaking in, critical mass, and gaining influence. The true power in boards lies with a handful of select committees: audit, nominating/governance, executive, and compensation. Across the Fortune 500, 58 percent of companies have at least one woman chairing a board committee, but the numbers of women leading these key groups is far lower: Only 21 percent of nominating or governance committees have a female chairperson, Whitler and Henrietta find, and just 5 percent of executive committees. Meanwhile, women hold just 6 percent of board chair positions, and in half of those cases, it’s because that woman is the CEO of the company.