Women Directors: Survey vs. Survey

It has happened again. When I release the results of our quarterly Directors Roster report on new women joining corporate boards — which I did in my blog post of March 8th — I inevitably hear from one or more of the other trackers of board composition. They are puzzled — and, it appears, alarmed.

Their beef is that there is a big disconnect between the Roster numbers and their numbers. The Roster has been documenting for two years now elevated levels of women joining boards — in the fourth quarter of 2010, 38% of new directors were women; for 2010 as a whole, 34% of board appointees we tracked were women. Most if not all other major surveys point to board representation of women still stuck in the mid-teens range, where it has been for years.

"So what's up with your numbers?" I get asked. There is an underlying fear that prompts this question, which is this: the optimistic picture that we present could lull people into thinking that recruiting developments are going along just swimmingly, when in fact all the major surveys of board composition do not seem to bear that out.

I am moved to share my response to the challenge I received after this week's release of the Directors Roster report on women board recruiting:

Dear Colleague,

I do not see the disconnect or discrepancy that you see. Let me explain how I mesh the numbers.

Your data is a snapshot of board composition at a fixed point in time — an annual look at who is sitting on a defined universe of boards.

The Directors Roster data is a snapshot of a quarterly flow of activity at a random universe of boards — companies that happen to have added a new board member.

This is apples and oranges. There is no way to sync these two sets of data to make any sensible matchup.

What we are looking at is velocity — a moving target — and you are measuring an end point.

In looking at the Directors Roster that just hit the street this week, you can see for yourself the flow of activity that we tracked in the fourth quarter of 2010 and the new women directors that came to our attention.

It seems to me that we need both sets of measurements — yours and the Directors Roster — to properly gauge marketplace activity, and I don't really see any conflict in what these two sets of numbers report.

It is understandable that my counterpart is concerned about overly optimistic conclusions that might be drawn from the Roster data. That’s why I feel the urgency to bring other surveys to the attention of the Directors & Boards audience that show how sluggish the progress is of board diversity. Our Roster numbers are useful for adding an important dimension to the discussion of board diversity, but I agree that many questions are left unresolved about the enduring impact of this measure of velocity.

Perhaps it is a matter of time — and it will be a lot of time — before we see the cumulative impact of these elevated velocity levels. But something is going on, and that is where the Roster data plays an important tracking role.

Pictured is Ellen Kullman, chair of the board and CEO of DuPont Co., who has joined the board of United Technologies Corp.

New Directors: The 2010 Class

The numbers are crunched, and here is how year 2010 shaped up for director recruiting.

According to the Directors & Boards Directors Roster, the journal's quarterly and annual reporting of executives named to public company boards, we tracked a total of 420 new director appointments named to 359 company boards.

Here is where the new directors came from, ranked by predominance of backgrounds:

2010's New Directors

1. Retired Executives: 148 (35%)

2. Chairman/CEOs: 84 (21%)

3. Senior Officers: 67 (16%)

4. Finance: 43 (10%)

5. Academia: 30 (7%)

6. Consultants: 28 (7%)

7. Not for Profit: 10 (2%)

8. Legal: 5 (1%)

9. Miscellaneous: 5 (1%)

Total: 420 (100%)

Women: 142 (34%)

Source: Directors & Boards Directors Roster

The number of new women directors gets further comment in my blog post of March 8.

Further detail on the 2010 director class — including names and affiliations of the new board members displayed with the companies who added these individuals — will be provided in the "Governance Year in Review" special issue of Directors & Boards to be published in July. The Directors Roster is sponsored by our close colleagues at Heidrick & Struggles International. Kelly McCarthy is editor of the Directors Roster.

This is the first look at this data.

There are a number of interesting observations to be made about the 2010 director class, which will be the topic of follow-on "Boards At Their Best" postings.

Pictured is Stanley McChrystal, retired U.S. Army general who commanded the U.S. and NATO's security mission in Afghanistan and who is now a senior fellow and teaches a leadership seminar at the Jackson Institute for Global Affairs at Yale University; Gen. McChrystal joined the JetBlue Airways Corp. board in November 2010.

Women Directors: Big 2010 Finish

Here is a key piece of data to announce on the 100th anniversary of International Women's Day:

After dipping back into the mid-20% range in the third quarter of 2010, the recruitment of women to corporate boards rebounded strongly in the fourth quarter. During the October to December period, 38% of the newly elected directors tracked by the Directors Roster were women.

Here is how year 2010 added up for the board recruitment of women:

• Q1: 34% (31 women out of 90 new directors)

• Q2: 36% (41 women out of 115 new directors)

• Q3: 26% (27 women out of 102 new directors)

• Q4: 38% (43 women out of 113 new directors)

Total: 34% (142 women out of 420 new directors)

The Directors Roster is the quarterly and annual record of newly elected directors to corporate boards tracked by Directors & Boards and published as a special feature in each edition of the journal. The data is gathered and written up by Directors Roster Editor Kelly McCarthy.

Year 2010's total for women of 34% is down slightly from 2009's total of 39%, representing 165 newly elected women directors out of an overall 424 board appointments. But 2009 marked a surprising leap from 2008 — when women represented 25% of the total tally of new directors, closer to trend throughout the earlier years of this decade. (For stark perspective, in the mid-1990s when we first started the Directors Roster data tracking, the percentage of newly elected women directors on a quarterly and annual basis was typically in the high single digits or low teens.)

So with one-third of new directors in 2010 being women, it does show that 2009 was not an utter fluke. We will continue to track the numbers closely in the Directors Roster to see how 2011 plays out. But two back-to-back strong years might well indicate that we have entered an era that will be characterized by elevated levels of board recruitment activity for women.

And on that upbeat note I will happily join in celebrating International Women's Day.

Pictured is Margaret Foran, who joined the board of Occidental Petroleum Corp. in 2010's fourth quarter. Peggy Foran is chief governance officer, vice president, and corporate secretary of Prudential Financial Inc.

Women on Boards Q3 2010

The torrid pace of women being elected to corporate boards has cooled off in the third quarter of 2010. Our Directors Roster data tracking of newly elected board members shows women comprising 27% of the total. This is down from 36% in the second quarter of this year and 34% in the first quarter. For 2009, women comprised 39% of newly elected directors, according to our closely watched Directors Roster data.

The third quarter — July through September — can often be the slowest quarter of the year for new corporate board elections. The Roster recorded 103 board additions in total, down a tad from 115 in the second quarter, but up from 90 additions in the first quarter.

Representative of the Q3 elections is Trudy A. Rautio (pictured), EVP and CFO of hospitality and travel company Carlson, who was elected to the board of Imation Corp., which offers data storage and security products, in July. (A noteworthy feature of the Imation board is that it has a woman as nonexecutive chairman — Linda W. Hart, vice chairman and CEO of the Hart Group, a diversified group of companies primarily involved in residential and commercial building materials.)

The full display of the July-September board elections will be in the Directors Roster that is published in the Fourth Quarter edition of Directors & Boards. That issue comes off press in early December.

Gone, Baby, Gone: Lawyer-Directors

The Directors Roster that is published in every issue of Directors & Boards is mostly well known for its tracking of newly elected women directors and the noteworthy data findings from that research.

But many other insights into director recruitment and board composition come out of our Roster research. Here is one such finding worthy of note: In the Directors Roster launch year of 1994, the percentage of lawyers taking a seat on corporate boards was 11%.

Can you guess the percentage total in 2009? The answer: 1%. That is a major ramping down.

A smart aleck might chime in and say, “Gee, I am surprised it was so high.” The common wisdom is, “Why would a lawyer choose to join an existing or potential client board? Why subject yourself to revenue-foreclosure possibilities for the firm? Or risk being tripped up by the director independence rules or potential conflicts of interest? Or the liability”

But as our Roster data suggest, there obviously was in governance days of old — not so old at that — a greater representation of lawyer-directors.

One of my favorite anecdotes relating to the role lawyers played as board members was told to me by Raymond Troubh.

Regular readers of Directors & Boards will be familiar with Ray Troubh. He is one of our favorite authors — always chock full of important insights on board leadership and generous with his wise counsel on being a good director. Ray proudly wears the mantle of professional director. A graduate of Yale Law School, he came to corporate directorship first as a lawyer and then as a banker, before hanging out his shingle as a fulltime director.

The background in law was a valued asset he brought to his board work. We talked about that when I interviewed him for the “Oral History of Corporate Governance” that I did in 2001, on the occasion of the 25^th anniversary of Directors & Boards. In reviewing his career trajectory from law school to the boardroom, here is a snippet of what he had to say:

“For board purposes the combination of my legal and investment banking experience was a great advantage. As a young lawyer I used to attend board meetings and draft minutes and prepare resolutions and watched how boards functioned — watched the chemistry among the directors. As an investment banker I made presentations to boards on doing financings or doing a tender offer or merger. And because I understood corporate law I was not as afraid of lawsuits and of standing up to the hostile bar.”

You can imagine what a comfort it was to his fellow board members to have a peer steeped in the rule of law, and procedures of law, and someone who is able to go toe to toe with inside and outside counsel as well as opposing counsel. Who would not want to serve on a board with a member like that?

For better or worse, the Directors Roster is documenting that those days are over. An option for knowledge sharing and “courage making” among the close circle of board members has been made moot — just as directors are being barraged by an unprecedented onslaught of new regulatory and investor aggressiveness.

What a time it would be to have within their ranks a member intimate with the law — the law as wielded by Congress and the White House, regulatory agencies, and the plaintiff’s bar.

It’s clear that, post-Dodd-Frank et al., boards need to embrace an ever-closer relationship with inside and outside counsel. For this Boardroom Briefing, we tapped many experts in the legal community who are close advisors to boards for their current best advice on a range of timely and pressing governance matters. Click here to access a copy.

Closing the Gender Gap

I am just back from Washington, D.C., where I took part in a most enlightening conference. Themed "Closing the Gender Gap: Global Perspectives on Women in the Boardroom," the daylong program held on Thursday, Sep. 16, was filled with experts from the corporate, diplomatic and academic sectors from around the world — all of them influential in tracking trends in board diversity and even moving the trendline along for increased presence of women on boards.

As a member of the opening panel in the morning, I had the pleasure of sharing with the audience some of the newsworthy data from the Directors & Boards Directors Roster, our quarterly and annual reviews of new appointments to corporate boards.

Actually, SEC Commissioner Luis Aguilar beat me to the punch. He launched the day with a keynote address in which he cited some of our Roster data in his compelling tribute to the value of board diversity and review of what the SEC is doing to move the needle in making it happen.

The key stat that both the Commissioner and I conveyed was that 39% of board recruits in 2009 were women. That represented a big ramping up from the 25% rate of women as new board recruits in both 2008 and 2007 — and a tripling from the 13% rate of women named to boards that we tracked in the first year of collecting this Roster data, which was 1994.

One reason 39% is a figure worthy of note is that much of the conference centered on analyzing the impressive experience underway in Norway, which legislated a gender balance on boards mandate of 40%. We are not anywhere near that in the U.S., so I did have to temper the enthusiasm over the Roster data by admitting that even a continuing 39% rate of new women directors does not get us anytime soon to a state when women hold 40% of U.S. corporate board seats.

Nonetheless, the Roster holds hope that a progressive trend is in place. We are still maintaining an elevated state of new women directors so far in 2010: In this year's first quarter, the rate was 34%, and in the second quarter (being announced here for the first time), the rate was 36%. (As a representative new woman director elected in Q2, pictured is Christine McCarthy, EVP of corporate finance and real estate and treasurer of Walt Disney Co., who joined the board of FM Global, a commercial and industrial property insurer with $5 billion in revenue.)

Kudos to Susan Ness, senior fellow of the Center for Transatlantic Relations at the School of Advanced International Studies (SAIS), Johns Hopkins University. She brilliantly organized and chaired the "Closing the Gender Gap" conference, which was held at SAIS. If we can keep the Roster (i.e., free market activity) data in an upward trajectory, keep the SEC providing its big-stick backing for board diversity, and keep having impressive consciousness-raising programs like this SAIS conference trumpeting the value that women bring to boards, we are bound to show progress in closing the gender gap in the boardroom.

Yes! There Is Good News on Women Directors

Most of the surveys on women on boards are pretty punkish — showing incremental, at best, advances by women in securing board seats. Among the key findings in ION's 2010 survey released in March:

• The low number of women directors and executive officers in U.S. public companies has stayed more or less the same, with small variations from year to year.

• In the 14 regions represented by ION's member organizations, women hold between 8% and 18% of the board seats in all the companies included in the research.

• In Fortune 500 companies in ION's 14 regions, women hold between 12% and 19% of all board seats. Nationally, the comparable figures for Fortune 500 companies are 15% (2009 Catalyst Census) and 16% for the S&P 500 (2009 Spencer Stuart Board Index).

The only good news that I ever see are the numbers that we here at Directors & Boards report — and do we have some exceptional numbers that we are just releasing for 2009.

Last year, women represented 39% of all new board appointments! That is up from the previous record high of 25% representation in 2008. And way way up from the more typical 13% when we first started recording board appointments in 1994.

That 39% figure represents 165 women out of 424 board positions filled in 2009 as recorded in the Directors & Boards Directors Roster.

We do an authoritative tracking on a quarterly and annual basis of public company board appointments. I have reviewed the parameters of our Directors Roster reporting here. These are numbers you can take to the bank.

Something big happened in 2009 — women did indeed make a major advance in securing board appointments. We may be the lone voice in the wilderness of board diversity surveys to note that, but it is true and it offers the promise of much stronger advancement by women in the boardroom in the future.

Pictured is Janet Jankura, who was elected to her first corporate board in 2009; she is profiled in the special Governance Year in Review issue of Directors & Boards in a new series called "My First Board," reported by Roster Editor Kelly McCarthy.

New Directors: The Numbers Are In

The numbers are crunched, and here is how year 2009 shaped up for director recruiting.

According to the Directors & Boards Directors Roster, the journal's quarterly and annual reporting of executives named to public company boards, we tracked a total of 424 new director appointments named to 326 company boards. Here is where the new directors came from, ranked by predominance of background:

1. Retired Executives: 170 (40%)

2. Senior Officers: 65 (16%)

3. Chairmen/CEOs: 57 (14%)

4. Finance: 47 (11%)

5. Academia: 39 (9%)

6. Consultants: 22 (5%)

7. Not for Profit: 14 (3%)

8. Legal: 6 (1%)

9. Miscellaneous: 3 (1%)

Total: 424 (100%)

Women: 165 (39%)

Source: Directors & Boards Directors Roster

The number of new women directors is worthy of further comment. See the follow-on blog post of July 12.

Seven pages of the Governance Year in Review special issue of Directors & Boards just coming off press are devoted to "Who's on Board 2009" — a sampling of this new director activity. The article displays the companies adding one or more (as in the government-mandated cases of AIG and General Motors, for example) new board members, who those new directors are and their titles and affiliations at the time of appointment. A superb mini-data base for those wanting more detail beyond the numbers. The Directors Roster is sponsored by our close colleagues at Heidrick & Struggles International.

Pictured is John Lechleiter, chairman, president and CEO of Eli Lilly & Co., who joined the board of Nike Inc. in 2009; he represents a declining category from which new directors are being successfully recruited, i.e., a sitting CEO. In 2008 Chairman/CEOs represented 21% of all new directors.

Women on Boards: It's All in the 'Velocity'

Today is International Women's Day — a day to mark the economic, political and social achievements of women. The first IWD apparently was celebrated in 1911, so this special day of recognition is impressively headed toward its centenary.

I can't think of a better way for Directors & Boards to mark this day than to highlight the strong numbers that we are seeing in our Directors Roster of women being named to corporate boards. The Roster is the special feature published in each edition of Directors & Boards that tracks quarterly appointments to corporate boards. It is our mini-database in each issue of new directors compiled by our research pro, Roster editor Kelly McCarthy.

The just-published First Quarter 2010 edition of the journal includes our tracking of new directors added to boards during the final three months of last year, October-December 2009. Here is the number: Of the 111 new directors we recorded, 46 are women. That is 41%, for those counting in percentages. And that is a noteworthy percentage, for sure.

To put this in some perspective, when we first started the Directors Roster quarterly recording of new directors in 1994, it was more the norm for the percentage of new women directors to be in the low teens if not high single digits. Yes, that's right. Take the final quarter of 1996, as a rather inglorious example: Of the 199 new directors in that Roster, 16 were women — 8%, if one has the temerity to count.

Our numbers are very much different from the results reported by the major surveys on board composition, which still show a poor representation of women on boards — solidly anchored for years, it seems, in the teens.

But a business colleague with whom I recently shared our numbers put her finger on the nature of this discrepancy, even better than I have been in framing our results: the Directors Roster, she recognized, measured the "velocity" of new women entrants onto boards. If that quarterly velocity stays strong, the overall representation that is measured by the annual surveys should gradually rise. In other words, the Roster is an early indicator of a "change in the atmosphere."

The Q4 Roster caps the strongest year we have ever seen here at Directors & Boards for women joining corporate boards: In the Q1 2009 period, we recorded 38% representation of women; Q2 came in at 39%; and Q3 totaled 43%. And now for Q4 we only ratcheted back a notch to 41%. These are breakthrough numbers.

So on this International Women's Day let's give a cheer for the velocity with which women are being appointed to boards. By the centenary celebration could I be in position to report that our velocity number has cracked 50%?!

My thanks to Autumn Bayles, SVP of strategic operations for Tasty Baking Co. and an officer of the Forum of Executive Women in Philadelphia, for refining the "velocity" nature of the Directors Roster data.

Pictured is Lisa Caputo, EVP of global marketing and corporate affairs of Citigroup Inc., who was a representative member of the Q4 2009 grouping of new women on boards; she was added to the board of Best Buy Co. Inc. And what a fitting new director she is to single out on this International Women's Day-themed blog posting: Her background includes being founder, chairman and CEO of Citi's Women & Co., an education, resources and networking initiative that helps women build financial knowledge.

Women on Boards — Bigtime

Here is one incredible statistic: In the third quarter of 2009, 43% of newly appointed directors were women.

This is a chart-busting number. Directors & Boards has been tracking new board appointments by quarter since 1994. We publish the quarterly data in each edition of the journal in a section called the Directors Roster. In the early years of our director data tracking, it was not unusual for the percentage of new directors who were women to be in the low teens or single digits even. That was the case in 1996, for example, when women represented only 9% of all new board appointments.

It wasn't until the fourth quarter of 2005 that the percentage of women named to corporate boards broke above 20%. It stayed in the low to mid-20% range for the next several years, occasionally dipping back into the teens for a quarter or two.

Then we broke through to an impressive new high in the first quarter of 2009, when 38% of new directors were women. I honestly thought this might have been an anomalous report, and that we wouldn't see this number surpassed this year — or perhaps ever! The number of women appointees did dip to 32% in the second quarter, but that was still way above trendline.

Now here we are witnessing women being almost one out of two board appointments in the July through September period.

Melissa Payner-Gregor (pictured), Frances D. Fergusson, and Nancy E. Cooper are representative of these new appointments. Payner-Gregor is the CEO of Internet retailer Bluefly Inc. who has joined the board of Destination Maternity Corp., a designer and retailer of maternity clothing; Fergusson is the retired president of Vassar College who is now a director of Pfizer Inc.; and Cooper is EVP and CFO of CA Inc. (formerly Computer Associates) who has been added to the board of Teradata Corp., the $2 billion data warehousing business.

There is something happening. While national surveys still show a shockingly poor representation of women on boards, our Directors Roster data looks to be an early indicator of big changes afoot in the board recruiting market. Stay tuned to this data.