“It’s a Demand Issue”
Even years after women started entering the workforce in pursuit of high-powered corporate positions, many companies held fast to the archaic notion that there simply aren’t enough qualified female execs who can handle a position on a board of a massive traded public company. Babiak says that line of thinking is simply inaccurate.
“It’s not a supply issue,” said Babiak, “it’s a demand issue.”
Paula Lovell, past chairman of the Federal Reserve Bank of Atlanta and the founder and CEO of national public relations firm Lovell Communications, agrees with Babiak. As a long-time champion of diversity in the boardroom, Lovell is passionate about connecting large corporations with professional women who are more than qualified to hold board positions.
Lovell’s involvement in the movement increased in the early ’90s after a conversation she had with a prominent Nashville businessman during which she encouraged him to appoint at least one woman to his board. His response hurled Lovell into action.
“He said that he would love to have a woman on his board, but that he just could not find one who was qualified,” Lovell said in an interview with InvestorPlace. “I told him he was wrong and that I would send him a list of 100 women who would be qualified to sit on the board of his company.”
Lovell made good on her promise and started an organization called “100 Wonderful Women.” She quickly came up with the names of close to 70 qualified women in the Nashville area alone who she referred to as corporate “rock stars.” Through a network of other professionals, the list continued to grow. By the time the businessman retired, three women were serving on his company’s board.
Although the 100 Wonderful Women group no longer exists, Lovell continues to help companies and recruiters find qualified female board members through her involvement with Woman Corporate Directors. WCD is an international community of women who serve on boards. On average, each member of WCD serves on three to four major corporate and/or nonprofit boards, and 85% of women in WCD are directors of public or large private corporate boards.
While the fact that women hold only about 16% of board seats at America’s largest companies is sobering in many respects, Betsy Cohen, CEO of The Bancorp (NASDAQ:TBBK) and its subsidiary The Bancorp Bank, as well as an active member of Aetna‘s (NYSE:AET) board, says the dynamics within boards regarding women have changed for the positive since she served on her first board 39 years ago.
“When I first started to sit on public boards, I would say something and there would be dead silence,” Cohen said in an interview with InvestorPlace. “Then, the man next to me would say the same thing, and everyone would say, ‘Bob, what a great idea.’ That doesn’t really happen today. Today, there are many more opportunities for women to exercise their professional positions.”
Cohen is hopeful that even more change is around the bend. She particularly encourages companies to take an active role in mentoring young professional women.
“People cannot always define their goals without seeing someone who has gone ahead of them,” Cohen continued. “By and large, people are following the paths that they can envision because they’ve seen it.”
When it comes to future progress, Russo echos Cohen’s sentiments.
“The best approach to initiate change really begins at the top down. It takes a real commitment to the importance of diversity and inclusion — not just at the board level, but throughout the organization.” Russo points to Alcoa as a “great example” of a company that prioritizes diversity through a plethora of internal programs.
She also offered advice to Fortune 500 companies that don’t yet have women board members but want to change that when a position opens: “There are many qualified women available to serve in leadership positions on public boards. Companies that are really serious about wanting to add diversity to their boards should talk with search firms and specifically request that they only bring them candidates who are women.”
Companies cannot expect to perform at levels required for growth and financial sustainability without adding diversity — gender, experience, culture, etc. — to their executive suites and boards. Shareholders should demand nothing less.