Companies that want to grow their equity and their price book value better put women on their boards. That’s backed up by a recent Credit Suisse report that concurs with decades of studies of female executive leadership. The executive search firm Spencer Stuart now reports women’s representation among new S&P 500 directors stands at 30 percent, the highest level they’ve seen. A new report by Executive Women of New Jersey illustrates incremental improvements in New Jersey. It’s was overseen by the Executive Vice president of the Newark Regional Business Partnership Barbara Kauffman.
Williams: How has women’s representation on boards in the state differed from last year to this?
Kauffman: We measured it two years ago, and in the two years unfortunately the needle has not moved a huge amount. We did improve a little bit, a couple of percentage points, but at this pace we need to find ways to accelerate that.
Williams: What’s the hold up? It’s 2015.
Kauffman: Well, one of the barriers is just simply the number of seats available. The directors are getting older and older. Term limits aren’t enforced. If those things were to happen there would be more turnover on the boards and there would be more opportunity for women to even have a shot.
Williams: What about the ladder, if you will, the pipeline to board positions?
Kauffman: Well, there’s a number of ways that we cited that could improve women’s opportunity. One of them is to ensure that there’s a search for a candidate that a women is part of the pool, but more importantly to look at skill sets. So if you only look at a CEO, a sitting CEO, you’re going to find a small number of women relatively. But if you look at, for example, someone who specializes in IT, you’re going more easily find a women who would fit the bill.
Williams: So you’re suggesting instead of saying, ‘we need diversity lets pick all women,’ you look for a skill set, and you end up getting a broader selection?
Kauffman: If you look at the skill set, if you don’t say we’re only going to take a sitting CEO or a retired CEO.
Williams: 25 percent of New Jersey companies in the Russell 3000, which is the gradient that you used, has no women directors at all. But that’s down from 30 percent last time. Why do you think there’s that change?
Kauffman: It’s partly that it’s just slow to move in part because the seats are relatively few. It’s happening. For example, Jane Elfers from The Childrens Place, The Childrens Place is one of the top three, and Jane said why wouldn’t I want my board to look like my customers?
Williams: You tell a story about Susan Story, who is the CEO of American Water. What’s her takeaway?
Kauffman: Her takeaway is somewhat similar; that its a smart business decision. It ties into the bottom line which is about performance.
Williams: Do women have a different attitude on boards than men do? Do they bring something that men don’t?
Kauffman: The statistics are showing that as a result, we don’t know specifically what the woman brings to the table, but the result is better return on equity, better stock price and it seems to be also true for executive officers, women in executive officer positions. The more there are the better it does. There’s a break point at three, and that’s where we gave our 16 gender diversity awards.