When attendees gather for the first annual Daily Record Women’s Leadership Summit on Tuesday, one of the key topics for discussion will be how to improve Maryland’s below-average rate of including women on company boards.
Increasing female board representation won’t happen on its own, says Ann Quinn, the president of Executive Alliance, a nonprofit advocating for women’s leadership in business.
“It has to be a priority and it has to be intentional,” said Quinn, who is also the owner and principal of Quinn Strategy group.
Quinn said that offering flexible maternity and paternity leave policies and equal pay for equal work are critical steps toward the goal of enhancing gender diversity within companies.
She said many boards want applicants to have been a CEO of a major company, which can be a big obstacle for women. Of all Fortune 500 companies, only 27 have a female CEO.
Studies have shown that boards with greater gender diversity perform better than those with less.
A report conducted by wealth management company Credit Suisse conducted from 2006 to 2012 found that companies with women on their boards surpassed their less diverse counterparts. The companies with a market value of more than $10 billion that had at least one female director outperformed companies with boards made up exclusively of men by 26 percent.
An earlier study conducted by Catalyst, a nonprofit pushing for female inclusion in the workplace, found that companies with more women board directors experienced 53 percent greater returns on equity, 42 percent greater returns on sales and 66 percent greater returns on invested capital.
Maryland Sen. Cheryl Kagan, who proposed legislation aimed at diversifying boards in the state, said that it’s all about “having different voices in the room.”
Her bill would have required a clause in procurement contracts outlawing discrimination in the formation or composition of corporate boards, but it stalled in the House of the Maryland General Assembly in March. Kagan said her bill was “shockingly controversial.”
“My colleagues … didn’t seem to share my belief that with taxpayers dollars we should be able to extract some commitment towards equality, or at the very least outlaw intentional discrimination,” Kagan said.
In April, the Pennsylvania House of Representatives passed legislation regarding corporate board diversity. The law encouraged, but did not require, companies to have at least 30 percent female directors on their boards by the end of 2020.
A similar measure passed in California in 2013, similarly lacking in enforcement provisions.
“It’s one thing to call on people to do the right thing, it’s another to offer an enforcement mechanism,” Kagan said.
How Maryland stacks up
Maryland companies continues to lag behind national averages for female directors, according to a 2016 survey conducted by Executive Alliance. (The 2017 survey will be released in early June. The 2016 survey can be found here.)
The study found that 14.4 percent of Maryland companies surveyed had women as directors, compared to the national average of 20.1 percent. Over 30 percent of the 76 companies in the survey had no women directors at all, compared to the national average of about 5 percent. The number of women of color holding board seats remained stagnant at 13.
Quinn said she attributes this to the large number of banking and financial services companies in the state, which tend to be male-dominated, she said. She expects the 2017 surveys results, which are expected to be released in June, to mostly stay the same this year, since boards typically have minimal turnover.
Executive Alliance member Carol Coughlin, who is also the CEO of BottomLine Growth Strategies, agreed.
“It’s not something that happens overnight, it’s something that happens over time. We are moving in the right direction, though,” Coughlin said, adding that flexible scheduling policies and mentorship programs are positive steps for businesses.
Quinn said that businesses must recognize unconscious gender bias in order to improve.
“I’ve been in situations where I’ve been the only woman visiting a client or visiting an investment bank and no one knows where the women’s room is or even thinks to tell me that,” she said.“ We need to acknowledge those and laugh about them and talk about them.”
Men should play a role too, she said.
“The message really shouldn’t be that women need to lean in. We do, but men sort of need to pull us in as well,” she said, adding that men should seek female opinions in discussions and meetings.
Both Coughlin and Quinn will be in attendance at The Daily Record’s Women’s Leadership Summit on June 6, where they’ll discuss how women can prepare for and gain board and other management positions in their companies.
How to succeed
The companies that have successfully diversified their boards and senior management teams have some things in common — most had clear strategies and consistently sought to make diversity or inclusion a core value of their business.
Nancy Prue is the director of shareholder communications for Adams Funds, which was lauded on the study’s honor roll for having at least 20 percent female representation among directors and executives. She said the investment company, which has 21 employees, has a sort of informal mentorship program for women. Women leaders and board members tend to engage with new female hires, she said.
“There’s always been a female rising in the company as new women were coming in. It’s just a natural fit,” she said.
The company offers eight weeks of paid maternity leave, and an additional four when new mothers can choose to use their vacation days or go unpaid, she said.
Asset management firm T. Rowe Price, which was also noted in the survey, now has 4 women directors, perhaps due in part to their Women’s Roundtable, which was started in 2011.
The group has been focused on those in leadership and has about 350 members, but is transitioning to welcoming all associates, including men, and hopes to reach 1,000 members by the end of the year, said Roundtable chair Donna Anderson.
The group hosts quarterly two-hour Diversity Dialogues on topics such as the obstacles faced in negotiation and networking.
“You don’t ever get good at having uncomfortable conversations if you don’t practice,” Anderson said.
The group’s mentorship program, which pairs females in mid-level management positions with women in senior leadership position, is in its third year, and includes about 20 pairs. Each pair is given 12 discussion topics, one per month, Anderson said.
The group also found that a disproportionate number of men came into the business with experience discussing stocks, so it set up a training program for female first-year MBA students.
Other companies noted on the survey for having large numbers or percentages of female directors pursued different strategies.
For example, Marriott International, which has four female directors according to the Executive Alliance study, established a Women’s Leadership Development Initiative in 1999, offers 70-day job-protected and 10-day fully paid maternity and paternity leave, and childcare subsidies.
At Lockheed Martin, which was on the businesses on the honor roll of the Executive Alliance study, diversity councils drive inclusion efforts.
As for Executive Alliance, Coughlin said it is reaching out to public companies in the area, as well as the governor’s appointments office, to make them aware of qualified female candidates for their boards.