Women remain an underutilized resource in Minnesota companies.
The business case for diversifying corporate leadership both in the boardroom and in the executive suite rests on decades of research. Studies have correlated the presence of women on boards with strong corporate leadership practices — the introduction of varying perspectives and experiences, sound decision-making processes, and collaborative leadership.1 Other studies correlate board and management diversity with strong financial performance, including profitability, firm value, higher shareholder returns, returns on assets and investment, and, particularly important during times of economic turbulence, lower volatility.2
Researchers point to the rising domination of women in the global marketplace — as consumers, entrepreneurs, investors, and a growing segment of the workforce. Recognized corporate stakeholders, women are acknowledged to hold increasing economic clout in society.3
Shareholder activism, governance reform, and women’s advocacy groups have increased pressure on companies to more explicitly address issues of corporate diversity.4 Yet the progress made to date nationally and as reflected in the Minnesota numbers is negligible. Women hold a small percentage of the available board of director seats and executive officer positions in Minnesota’s 100 largest publicly held companies:
- Twenty-seven of Minnesota’s top 100 companies have no women corporate directors.
- Thirty-two have no women executive officers.
- Most often, companies include just one woman corporate director on their board and/or just one woman executive officer in their ranks.
Increasing the number of women in corporate leadership roles is a matter of good governance. 5 Minnesota companies have a long way to go.
Walking the talk
Successful strategies to further women’s advancement in corporate leadership come from the top. Senior management plays a critical role in shaping and communicating a company’s commitment to diversity, supporting company initiatives, setting goals, and measuring success. Such strategies as diversity training, managerial accountability for diversity metrics, the creation of formal networks, identifying and developing high-potential talent, formal and informal mentoring programs, and work-life balance initiatives offer support for company diversity efforts.6
Every company has to find its way. “There’s no clear roadmap or something you can purchase out of a box [to achieve senior level diversity], so companies are struggling with the best way to do that,” says Tom Fuller, general managing partner at Epsen Fuller/IMD. “It requires a concerted effort on the part of senior managers, and with the day-to-day pressure to deliver results, their attention has become so short-term focused. Achieving senior-level diversity is a long-term initiative. A culture change needs to take place at the office of the CEO.” 7
Research suggests that without active leadership and commitment from senior executives — CEOs and their executive leadership teams, as well as sitting corporate directors — women will not advance in corporate leadership in Minnesota.
- Kramer, V.W., Konrad, A.M. & Erkut, S., “Critical Mass on Corporate Boards: Why Three or More Women Enhance Governance.” Wellesley Centers for Women, Report No. WCW 11 (2006). www.wcwonline.org/pubs/title.php?id=487
- Catalyst, “The Bottom Line: Corporate Performance and Women’s Representation on Boards” (October 2007). www.catalyst.org.
- 4. Wolfman, T.G., “The Face of Corporate Leadership: Finally Poised for Major Change?” New England Journal of Public Policy, Vol. 22, Spring 2007, pp. 47-48 and footnotes, 42-48.
- Branson, D.M. “No Seat at the Table: How Corporate Governance and Law Keep Women out of the Boardroom.” NY: New York University Press, 2007.
- Kilian, C.M., Hukai, D. & McCarty, C.E. “Building Diversity in the Pipeline to Corporate Leadership.” The Journal of Management Development, Vol. 24, No. 2, 2005, pp. 155-168.
- Epsen Fuller, T. “The Changing Face at the Top.” Epsen Fuller/IMD, May 2008. www.imd-search.com/knowedge.aspx as quoted in EmployeeBenefitNews. com, September 15, 2008. Vol 22, No 12.