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Corporate America and Women: More Progress, Please

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The idea that U.S. corporate boards need women hit the spotlight last year. Thursday was International Women's Day, so it's a perfect time to wonder if we're achieving a better balance in 2012.

GovernanceMetrics International has released its annual breakdown of female participation on corporate boards across the globe. The verdict is that females are making some progress in corporate boardrooms this year. However, bear in mind that forward movement remains slow.

Pockets of progress
GMI Ratings' 2012 Women on Boards Survey tracked more than 4,300 companies in 45 different nations. GMI's Paul Hodgson broke down the data, pointing out some of the most salient findings. For example, in 2012 we can celebrate a first: Females sit on more than one in 10 boards all over the world. Now, 10.5% of the directors GMI covers are women, up from 9.8% last year.

The percentage of companies with no female directors to be found has now fallen below 40% (another first). The percentage of companies boasting at least three women on their boards has increased by 1.3 percentage points. The bad news is that this achievement has only occurred at 9.8% of companies across the globe.

Some countries' corporate classes have taken a leadership stance on including females on boards of directors. Norway's a longtime leader; females represent more than 36.3% of the directors in that country's boardrooms.

France is big-time stepping up efforts to better integrate female perspective in corporate boardrooms. The fact that female directors in France increased by 3.9% in 2010-2011 is impressive, but bear in mind that this leap forward relates to a 2010 law mandating specific thresholds of female directors within specified timeframes. Now, the number of female directors in France is 16.6%.

America falling behind
So how does the U.S. stack up? The answer is: not very well for a country so many of us would like to call enlightened. Between 2009 and 2011, the percentage of females on American boards has increased a mere half a percentage point. The total percentage of women on U.S. boards is a paltry 12.6%.

Despite the fact that the majority (more than 70%) of U.S. companies have at least one woman on their boards, corporate America falls short on furthering representation. Only 10% of companies have more than three women on their boards, and a sad 2% of board chairs are female.

I asked GMI's Hodgson for some examples of U.S. companies that can boast having more than three women on their boards, and he revealed a few interesting ones. First off, for context, just 230 American companies have at least three females on their boards.

Walt Disney's (NYSE: DIS  ) board actually comes across as pretty impressive in the grand scheme of things. Susan Arnold, Judith Estrin, Monica Lozano, and Sheryl Sandberg make up a pretty impressive list of female directors at the kid-centric media giant. Estrin and Lozano are both chief executive officers at other firms, Arnold is a retired Procter & Gamble executive, and Sandberg is Facebook's current chief operating officer.

Hewlett-Packard's (NYSE: HPQ  ) board of directors has disappointed shareholders many times, but at least it can boast a solid dose of female leadership, especially since it named Meg Whitman as its new CEO. Still, it just hits the threshold of three female directors here: Whitman, Ann Livermore (a former HP employee and 30-year veteran insider), and former Alcatel-Lucent CEO Patricia Russo.

GMI's Nathaniel Flannery has been tracking this topic for a while, too, and recently called out 10 companies with zero women on their boards for Forbes. However, in a major sign of progress, Zale (NYSE: ZLC  ) , Gap (NYSE: GPS  ) , and Crocs (Nasdaq: CROX  ) have all added females to their boards since last year's public shamings.

Corporate America: More progress, please
Female perspectives and points of view bring strengths to many areas of our lives. When it comes to corporate management teams and boards, such strengths include lower risk-taking and a lesser tendency to go on pink-slip frenzies, for example. Our short-term market often celebrates layoffs for short-term profit boosting, but the less-acknowledged long-term story is what that mentality actually does to enterprises' future prognoses.

Come on, corporate America. We can do better.

Check back at every Wednesday and Friday for Alyce Lomax's columns on environmental, social, and governance issues.

Alyce Lomax does not own shares of any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Procter & Gamble and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (13) | Recommend This Article (22)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 10, 2012, at 8:33 PM, blablafool wrote:

    Women are doing just fine in this country. In fact they're beating out men in many areas, such as college enrollment. I suspect women will do much better than men in the future. Companies would rather hire them, as they generally have better social skills. Men are the ones in trouble. Gone are the days when jobs were mostly labor intensive and back breaking. Now you sit on your computer typing and talk on the phone. Men will have to become increasingly more feminized to compete. No more Clint Eastwoods and Mad Men. Lots more pink shirts and skinny jeans.

  • Report this Comment On March 11, 2012, at 10:58 AM, CMFAnurag wrote:

    It will be a hard road ahead for women to seek that parity unless they work for it. Check out the percentage of women in sciences, medicine or engineering. It is paltry. Who is stopping women from getting into these area? Why are there no women in auto repair or similar shops? Why they limit themselves to careers in modelling, cheer-leading, store fronts, office front office or admins?

    I am trying so hard to convince by daughter that cheer leading is no different from soft prostitution. Focus on math instead and build telescopes with me.

    The whole idea of color coding women with pink and men with blue is so ridiculous. My daughter is forced to like pink by the society that includes women. Why?

  • Report this Comment On March 11, 2012, at 10:44 PM, FreedomTrader1 wrote:

    How about this for a good idea? Use the Fool space for discussions that actually matter to someone some money to invest. Maybe take the whining about perceived gender unfairness to another venue?

  • Report this Comment On March 12, 2012, at 12:18 PM, DJDynamicNC wrote:

    "Use the Fool space for discussions that actually matter to someone some money to invest. "

    The inability to see how certain factors impact your investment is not the same as those factors having no impact on your investment. You would be wise to understand this difference.

  • Report this Comment On March 13, 2012, at 12:36 AM, goalie37 wrote:

    I'm all for it. I see no reason why a woman would be less inclined to raise my dividend payments than a man.

  • Report this Comment On March 14, 2012, at 10:55 PM, p1at0 wrote:

    Seriously -- do we have to put up with this kind of gender politics nonsense on the Motley Fool? This site is about investing, not social justice. If you want to publish a screed about how society and/or corporate America need to do more of the Right Thing for women, minorities, the homeless, transgenders, or cat jugglers, the New York Times op-ed page is your place.

  • Report this Comment On March 14, 2012, at 11:18 PM, p1at0 wrote:

    @DJDynamicNC, please substantiate your implied claim that having women on a board has a positive impact on the performance of an investment. Seriously, is that one of the factors you consider when investing -- how many women are on the board? In exactly what way do you factor that into your valuation model? Do you have some empirical data that shows that women on a board leads to greater stockholder returns? I'd like to see it.

    I love how the author of this article claims that boards would be better off because women are less inclined to take risks: "such strengths include lower risk-taking". Suppose there was a male hiring manager for a position that required risk-taking, and he said that he wasn't going to consider women because they're too risk-averse, or that they're too timid to lay-off employees in an economic downturn ("lesser tendency to go on pink-slip frenzies"). What would the verdict be on that?

  • Report this Comment On March 14, 2012, at 11:24 PM, CaptainWidget wrote:

    "We" is a myth. "We" is code word for "I want, so you do".

    There is no 'we', 'we' are millions of self motivated rational actors. Did you ever stop and think "maybe women don't want those spots on corporate boards"???

  • Report this Comment On March 15, 2012, at 9:40 AM, DJDynamicNC wrote:

    "Please substantiate your implied claim that having women on a board has a positive impact on the performance of an investment."

    I made no value judgments on the impact of women (or men) on the board of directors. The initial claim was that this article was "whining about perceived gender unfairness." I pointed out in response that it is unwise to pretend that something does not have an impact simply because you prefer not to believe that it does.

    Whether the impact is positive or negative will, as with all other aspects of any investment, depend on your personal preferences. For me, a company that does business according to my values is likely to include many women on the board. As you pointed out, you may prefer different values. To each their own.

    I do not see how this should be controversial.

  • Report this Comment On March 15, 2012, at 9:51 AM, DJDynamicNC wrote:

    --> ""We" is a myth. "We" is code word for "I want, so you do".

    There is no 'we', 'we' are millions of self motivated rational actors. Did you ever stop and think "maybe women don't want those spots on corporate boards"???"<--

    Quite a quick transition. Nobody can speak for large groups because "we" are millions of self-motivated rational actors.

    Meanwhile, one sentence later, we are supposed to consider the wishes of women as a monolithic group with but one desire (or lack thereof).

    I carefully reviewed the article for the part where Alyce suggested forcing women to work on corporate boards, but I must have missed it. I did not, however, miss the part of the civil rights era where people justified their excesses by saying "well did you ever think maybe those people don't WANT to eat in the same restaurants as us?"

    Suggesting that corporate America may wish to make provisions for including half of the population in their decision making process is not exactly a call for feminist jihad. Break it down and think which is more likely:

    1) That American women are just not as proactive as Norwegian women and would prefer not to be on corporate boards, and continued increases in female leadership as more opportunities are opened is just because they feel forced to do so and without that pressure from, uh, I guess articles like this, they would return to the kitchen where they belo- I mean, where they want to be.


    2) a subset of the population that only recently received the right to vote is being denied certain upper echelon opportunities in a country dominated by a religion that perpetuates the view that women should be subservient (and displays the social norms to follow), a country which to this day is debating whether or not women should even be allowed to have control over the basic reproductive health of their own bodies

    So yes, maybe they don't want those spots on corporate boards. But I don't find that a very compelling explanation for the data we have.

  • Report this Comment On March 15, 2012, at 10:55 AM, p1at0 wrote:

    >>I pointed out in response that it is unwise to pretend that something does not have an impact simply because you prefer not to believe that it does.

    I tend to "pretend", I guess, that all manner of things don't have an impact, until proven otherwise. I pretend that the phase of the moon, the color of the socks I'm wearing, the price of bananas, and the number of women on a corporate board have little or nothing to do with a company's performance, and therefore, I don't factor them into my investing thesis. If someone presents evidence that, say, the price of bananas *does* in fact affect performance (or I'm investing in a banana-intensive company) then I factor it into consideration. This author makes the claim that adding "female perspectives" to a board somehow impacts a company's performance, but provides no data to back up that claim. So I'm going to go on pretending that this, along with about a billion other things, doesn't impact performance. If someone offers compelling evidence to the contrary, I'll reconsider.

  • Report this Comment On March 15, 2012, at 2:58 PM, TMFLomax wrote:

    Sorry I'm late to respond in this conversation. I actually wrote a follow-up to this, that does mention data that showing outperformance of companies that have more women on their boards:

    I apologize that the original article didn't include more of this data, but it's out there. A lot of this hinges on the importance of having diverse groups in decisionmaking processes, and women bring plenty of positive attributes to the table (and boardrooms), particularly for long-term success. So, not a "social justice" thing or a political thing, but a common sense thing.



  • Report this Comment On March 15, 2012, at 8:22 PM, CaptainWidget wrote:


    1) That American women are just not as proactive as Norwegian women and would prefer not to be on corporate boards...>>

    You forgot possibility 3...the government is forcing Norweigan companies to take women onto their boards or risk being closed permanently.

    Yeah....that probably accounts for higher "participation" among Norweigan women. You really need to start researching these things.....

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