Philadelphia Inquirer: Women make up nearly half the workforce. They make 85 percent of consumer decisions. Yet they still have little say in how companies are run.
The latest report from the Forum of Executive Women, a Fort Washington, Pa., advocacy group, found that women hold only 10.7 percent of board of directors seats in the Philadelphia region's largest 126 public companies. That lags behind the nothing-to-brag-about national figure of 12.4 percent.
Too many companies are missing out on serving customers and shareholders better by tapping new voices -- women and other underrepresented groups -- for governing boards. They risk complacent group-think by always turning to the same pool of executive talent to devise corporate strategy, ensure financial accuracy, and safeguard shareholder interest.
Look only at Enron or WorldCom to see the dangers of a passive board.
Smart companies continually question their assumptions and adjust their perspectives. They can't do that effectively if everyone has the same background and worldview. Good corporate governance requires free questioning and, occasionally, open dissent. The system as it is now, doesn't promote that.
Since the Wall Street scandals, boards appropriately will be held more responsible for corporate oversight. The jobs will require more time and expertise. A select club of veteran executives won't be able -- and shouldn't try -- to manage multiple seats, as they do now.
This shift gives boards, now overwhelmingly dominated by white men, a chance to diversify.
Traditionally, boards have consisted only of CEOs, a rank not yet achieved by many women or minorities. That's why around Philadelphia the same few female names -- University of Pennsylvania President Judith Rodin and former CoreStates President Rosemarie Greco, for example -- pop up again and again when a director's seat opens. The Forum of Executive Women's study found that in 2001, just 10.3 percent of top executive positions regionally were held by women.
But the makeup of boards is changing in other ways, for the good. Companies are finding that their boards benefit from varied expertise in finance, marketing, law, information technology, public relations and human resources. That requires looking beyond the CEO level to qualified financial, operating and information officers; law and accounting firm partners; self-employed entrepreneurs, or heads of nonprofits. This wider pool will yield many qualified women and minority candidates.
There are enough qualified people out there to move beyond tokenism.
It will pay off.
Diversity isn't just symbolic. It makes good business sense.