Still chilly after all these years: a longitudinal study of corporate board composition in Tennessee.

A look into the corporate board rooms across the nation shows the under-representation of women at the table. The absence and near absence of women in many board rooms is perplexing. As an issue that has been the subject of ongoing public debate, it has been examined by investigative journalists and serious scholars alike. Top CEOs have stated their support for diversity at all levels of their organizations. Yet, the numbers continue to lag behind what would reasonably be expected given the advances women have made in other areas of business. The Bureau of Labor Statistics (BLS) reported that half of all workers in management, professional, and related occupations in 2006 were women. (1) Women may be scarce to absent at the top of leading companies, but they hold half the managerial and professional positions in the United States. In addition, women comprise 41 percent of purchasing managers and 60 percent of accountants and auditors. (2)

The Catalyst Census of Women Board Directors of the Fortune 500 found most Fortune 500 companies had only one or two women directors. (3) In 2005, fifty-three Fortune 500 companies had no women on their boards, one hundred eighty-two companies had one woman, one hundred eighty-nine companies had two women, and seventy-six companies had three or more women directors. Similar statistics are reported internationally.

Some 91 percent of companies in the S & P 500 have at least one woman director, which is up from 82 percent in 2002 according to the 2007 Spencer Stuart Board Index Study. (4) As we shall show later, having only one female representative may actually be counterproductive. Therefore, it is overly optimistic to celebrate a 9 percent increase in the number of women on corporate boards in the last five years. At the current rate, it will take seventy-three years for women to reach parity with men as corporate directors in the board rooms of the Fortune 500. (5)

Cheryl Francis and Kim Lyons reported that the gains, as small as they are, are not holding. (6,7) In her profile of corporate boards in Pittsburgh, Pennsylvania, Lyons found that having only one woman on a board does not influence decisions, and to attain balance more board diversity is needed to move beyond tokenism or separation from the group. (8) A similar profile of Chicago firms by Francis found that the total number of women on boards declined, even though more board positions were available. (9) Other cities and states--including Boston, Atlanta, Philadelphia, and California--are showing either no progress or are backsliding. (10)

In Europe the number of companies with at least one female on a board increased from 62 percent to 67.8 percent from 2002 to 2004 and from 10 percent to 11.4 percent in the United Kingdom over the same period. (11) In his study of European Union board rooms, Mike Berry further noted that Portugal has no women on the boards of any of the nation's companies. (12) However, in 2004 the Norway parliament passed a bill forcing private firms to have at least 40 percent women on their boards. (13)

Why Are There So Few Women on Boards?

The reasons for women's poor representation on boards of directors continue to be mostly the same. In addition to "glass ceiling" issues, women are excluded from informal networks and often face inhospitable corporate cultures. In our previous studies, we found members of boards want to maintain the status quo and thus select someone they know, someone like themselves. (14) Craig A. Peterson and James Philpot feel there is a systematic bias against females assigned to boards in general and to top board committees in particular. (15)

Serving on a board provides an opportunity to help guide a business, enhance personal business reputation, and network with a cadre of like-minded people. Otherwise, board membership can be a potential liability. However, increasingly there are reports that women are selective about serving on boards. According to Pitney Bowes chairman Mike Critelli in a recent Fortune article, the best-qualified women "tend to have many corporate suitors, typically growth companies in growth industries like technology and consumer goods." (16) Jaclyn Alcantara and Rochelle Brode-Singer noted some reluctance of women to serve on corporate boards as they realize the personal liability that is inherent under Sarbanes-Oxley requirements. (17) Women who reject board opportunities for these reasons show a mindset similar to that of their male counterparts.

Studies have found as well that some women directors are more likely to be affiliated with firm management through family ties and that female directors differ from other board members in terms of educational background, educational level, age, and board tenure. It is not atypical to find that a woman board member is related to either the chief executive officer or the president of the board. (18) Such exposure may result in two scenarios. First, a woman may be exposed to board liability by familial attachment that makes it impossible for her to remove herself from the board. Second, her presence may be perceived as tokenism, and she does not have the opportunity to develop the network to advance her participation on other non-family connected boards. The interlocking of boards becomes more pressing as we consider specialization of industry. For example, a recent study of women on boards found that organizational size, industry type, firm diversification strategy, and network effects (or linkages to other boards with women directors) significantly influenced the likelihood of female representation on boards. (19)

Experienced women capable of serving on boards are indeed available. Women are in the pipeline as business owners; women-owned businesses are growing at twice the rate of all U.S. businesses, according to the Small Business Administration. (20) The Center for Women's Business Research 2007 reports that women own some 10.4 million businesses employing nearly 13 million workers, accounting for 41 percent of all privately-held firms in the United States, and having $1.9 trillion in sales. (21) In higher education, too, the population of women in administration is growing. Women very clearly have leadership, financial, marketing, legal, and product knowledge to make important contributions to boards.

What Specific Contributions Do Women Make To Boards?

While researchers argue that it may be difficult to isolate the impact of a single director on corporate performance, (22) others disagree and point to issues of recruitment, retention, development, and advancement of top women on an organization's agenda when female directors are present. (23,24,25) These studies suggest the visible presence of women on the board may indirectly influence women's representation on other high-level organizational teams. The number of women on corporate boards reflects the degree to which leaders are open to gender diversity at other organizational levels, particularly at higher ranks. (26) Companies with female board members can attract more female talent and demonstrate to others that diversity is important. (27)

Increasing the presence of women on corporate boards is a business imperative: adding women on boards can have an important signaling effect to employees, shareholders, and the external business community. (28) Women offer unique perspectives, experiences, and work styles different from their male counterparts. (29) Women contribute to corporate boards by creating alliances through their preparation and involvement, by taking leadership roles and being visible, and by participating in important decision-making arenas. (30)

A 2007 study by Stephen Brammer, Andrew Millington, and Stephen Pavelin found more women on the boards of retail establishments, utilities, media organizations, and banking firms and suggested that close proximity to final consumers can explain the role of women in shaping board diversity. (31) These researchers agreed that the presence of females in the industry's workplace is less important as a predictor of board diversity than is the firm's external business environment and importance of mirroring the diversity of its customers. The knowledge that women bring to boards reflects their qualifying experience and their life experience. It is in the presentation of what life is like for half of the population that women can make a unique contribution.

Alison M. Konrad and Vicki W. Kramer in their study of Fortune 500 boards found women directors do make a difference in representing the concerns of a wide set of stakeholders including employees, customers, and the community. (32) Women are also more dogged in pursuing answers to difficult questions, and they bring a more collaborative approach to leadership, which in turn, improves communications. The authors did not address the "right" number of women to have on boards but did support these key benefits of board gender diversity. Women are more likely to be transformational leaders and encourage participation in power and information, enhancing the status of employees. (33) Women's unique, sometimes invisible, leadership style can gather people together. (34) While the United States has not passed legislation to mandate women's representation on boards as Norway has in requiring that 40 percent of a board be women, (35,36) the advantages of diverse board composition have been documented.

What Kind of Benefit Can Be Expected?