Thursday, December 27, 2007

Women in Leadership

How do you define “women in leadership”? Usually, it looks something like this: “women who have shown exceptional courage and leadership advocating for women’s rights and advancement.” Frankly, the last women with that kind of leadership credentials won the right for women to vote in 1919. Comparable levels of leadership have been quite rare ever since.

Instead, we have seen a lot of women who would have us believe that, by their association with “advocacy” or “women’s rights,” they ought to be included among that honored group. The few women who actually have done something constructive in that direction have been rather quiet about their achievements: Emily Card or Patsy T. Mink would come to mind. Do you know what they did? As my mother would say, “Go, look it up.”

Do women look at “women in leadership” the same way that men look at “men in leadership?” Apparently not. First of all, men keep copious stats on other men in leadership: from sports to corporate life, men are the data-mongers tracking how the men achieved what they did, how they accomplished meritorious things. Women who keep track of the achievements of women are considered egotistical and self-centered. However, women who keep track of the suffering of women, measures of their victimhood, their “only-ness,” are quoted copiously ad nauseam in the media. How is it possible for women to identify those women whom they could emulate if not by tabulating their endeavors, achievements and all of the reasons to follow in their lead? If women do not track the progress and successes – rather than the failures and suffering -- of women, then how can the next generation know what is worth following?

Do women look at “women in leadership” favorably? Apparently not. It is astounding how much venom is spewed, by female writers, on the characters of female political candidates and the wives of male female political candidates from both sides of the aisles. Such personal invective is reminiscent of the “Lord of the Flies” or the girls in the 7th grade. Bitter, acidic, asp-like, catty. Unpleasant by all measures.

Do women write about “women in leadership” in the same way that men write about “men in leadership?” How much have you read about the bacon and eggs that Mr. Edwards or Mr. Obama have eaten in Iowa? How really relevant are their haircuts or their choice of ties or the lack thereof? What does any of that have to do with their policies, politics, their thinking or their ability to make sound decisions for this nation? The public media discussion about candidates, today, is much more a reflection of the dummying-down that comes from journalists with a very very long history of writing about shampoos, diets, body odor, and personal shopping habits.

Do women know what “women in leadership” even look like? Do women know the difference between entertainment figures and individuals of competence and character? Is Oprah Winfrey really a leader? Or is she a female pied piper, very good at playing the advertising and marketing game that women love to hear and experience? Is Katie Couric a leading news-person or a person very adept at reading news scripts? Are Ms. Winfrey or Ms. Couric any more qualified than Susan Lucci to address international political issues? Wouldn’t Christiane Amanpour, even marginally, be a better source of diverse thinking about contemporary political subjects? Or Andrea Mitchell? Or any one of a hundred other much more qualified women political commentators?

Women in leadership. There are millions of highly competent women in leadership out there. But, you’d never know it from reading your daily newspaper, from listening to typical radio news or watching television, cable, satellite broadcasts. To find women in leadership, you have to turn away from most of that and go search for yourself. Literally.

Thursday, December 20, 2007

Is “Networking” Important?

Is “networking” an important factor in getting on a corporate board of directors? It depends on what you mean by “networking.”

Networking which is the “ghetto-ization among women-only groups” definitely is not an effective strategy for being named as a public company director. Networking which involves “women’s business advocacy groups” also is not an effective strategy because such collectives tend to be talkers rather than do-ers in the economic marketplace. Boards, above all else, are looking for women who have succeeded in doing something meaningful in the business world – preferably something that matches the skill-sets for which the nominating committee currently is searching.

Boards do not need advocates who have been standing on the sidelines, “cheerleading” and advocating rather than performing on the business playing field.

Women’s groups carry a stigma as more “social” than business. Women’s groups are not a proven mainstream path into executive recognition. Leadership of women’s groups simply has not translated into leadership among economic business activities.

Networking in “charities” has declined as a path into the boardroom over the past decades. Fund-raising is now a business development activity rather than a “social phenomenon.” Many major charitable nonprofit boards have become too large, unmanageable fiscally, non-transparent and economically ineffective (e.g.., United Way, the Red Cross). Some even suggest these groups, as constituted, have become un-leadable and un-governable.

Networking among “professional groups” does provide opportunities to exercise a demonstrable expertise on issue-oriented advisory panels or committees. These venues are where problem-solving expertise is valued within a diverse (i.e., co-ed) committee structure.

Networking among college/university boards of trustees also affords structure and operational parallels to the business world. In those cases where roles and responsibilities related to an expertise that is valued by the business world, such as technology, finance or law, then the trustee experience has transferability. If the campus board is simply a collection of celebrity tokens or a high-worth fund-raising group, the probability of transitioning to a corporate board is less likely today.

Some key factors predicting whether or not “a network” might contribute to the long-term goal of qualifying one for a corporate board role:

- Money is at stake and it matters how much and how well that resource is managed and spent.
- Decisions must be made and the organization benefits from quality choices
- Expertise is valued as a contributor to the deliberations.
- Organization has an impact that is real and substantive.
- Individual contributors are held accountable for their actions and decisions.

Saturday, December 15, 2007

More on Nonprofit Governance – 3

Our research into the women directors at California Fortune 1000 firms shows that the fewest women came by way of the nonprofit path. In fact, in 2006 and 2007, the women with “soft-skill backgrounds” tended to be the first to leave the corporate boardroom in the tougher and more demanding accounting environment of the post-Sarbanes-Oxley business world.

Proxy statements, where biographies of directors can be found, give short shrift to the nonprofit work of both men and women. The nonprofit experience exists, it is just likely to be more a personal interest – for men and women – than professional credentials qualifying one to serve on a corporate board.

On average, the women in our sample were on three nonprofit boards each. There was very little overlap among the women’s nonprofit roles: their paths would not be likely to have crossed in the nonprofit boards where they served. Many of the nonprofits were professional organizations related to a business career in technology, finance or law.

The women whom we interviewed told us the value they took from the nonprofit experience. Such committees were coeducational structures. The women differentiated these types of groups from women-only groups which tended to be supportive, focus on encouragement, but not results-oriented.

A common lesson learned from committee works was how effectively to use the group process: how committees work; how they conduct research, analysis and develop policy alternatives about a problem or subject; and how they move the group towards solutions. The women said their committee experience helped to refine their own problem-defining and problem-solving capabilities.

Committees were not simply situations where “one rubbed shoulders” with the social elite. The women developed experience giving testimony, conducting research, analyzing issues, collaborating with professional peers, building alternative strategies, testing them and putting them into effect.

The women cited committee experience as an excellent training in governance and strategic thinking and planning. The women were selected for the committees because their experience and competence added substantive value to the committee deliberations. The women brought innovative insight and perspective from their professional experience, not simply from their gender.

Very few women mentioned gender-oriented organizations which were seen as a narrow constituency. Women do “give back” extensively through speeches to women’s groups. They do not make a big thing of it. They do it quietly and personally.

Wednesday, December 12, 2007

More on Nonprofit Governance – 2

Women often are told to join a nonprofit board as a pre-requisite for getting on a public company corporate board. Behind that argument stands several factors or beliefs.

1. It is “easier” for women to get named to a nonprofit board of directors because it’s a volunteer position.

2. Nonprofit goals and objectives are more consistent with women’s priorities and preferences.

3. Women feel more “comfortable” on nonprofits because more women are on nonprofit boards.

4. Women feel more “at ease” on nonprofit boards because they are not as concerned with making and managing money.

5. Nonprofit boards provide an introduction to the hard work required of boards.

6. Nonprofit boards provide a good training ground to learn about governance, committee work, teamwork, delegation and leadership.

7. The liability or risks associated with nonprofit boards are less than that in the corporate world.

8. Nonprofit board service allows women director candidates opportunities to get out of their daily grind and become better known among decision-makers.

9. Nonprofit boards provide opportunities for women leadership candidates to network with male philanthropic leaders who dominate corporate boards of directors.

If there were more women serving on corporate boards of directors, then these arguments would suggest that that is where most corporate boards would search and find more top quality women candidates for public company boards of directors.

It has not happened. There are more women than ever before on nonprofits, yet those are not the women who are being selected for the for-profit corporate director roles.

It stretches the imagination to conclude that nonprofit boards could provide relevant training experience for shareholder-owned, higher-risk, profit-driven, globally-competitive, employee and public policy stakeholder-drive public company governance boards. They are in two entirely different economic spheres.

True, women and men of money and power will rub shoulders in nonprofit halls and gathering. Does shoulder-rubbing qualify as competency-building? Does one learn governance by association? Is fund-raising, today, the necessary pre-requisite for audit, nominating or governance committee performance? No, not very likely.

So, we might question why we would continue to hear the argument, “Get thee to a nonprofit board?” Do the women who suggest this hypothetical “easy” path into the boardroom believe what they are suggesting? Do they have a factual basis for this recommendation? Or perhaps they are spouting off “old wives’ tales?” Or worse, is it possible they are telling young women to pursue a fickle path in order to save the real golden opportunities for themselves?

There is no cheap and easy way to qualify for a director role on a public company today. That is true for women as well as for men. Why are women still being sold that bill of goods? Why are women still selling this hype and why are women buying it?

There is a difference between those who advocate that “more women ought to be directors” and those who advocate that “more women become qualified to be directors.” The first are zealots and activists, expecting someone else to do all the heavy work to make this problem go away. The second are educators, researchers and advisers who know and understand the economics of the director and governance marketplace -– and who believe it could be enhanced by greater competition and participation on the part of the right business actors.

It’s difficult to believe that anyone would think that there is any easy path into a board of director role in the post-Sarbanes-Oxley environment. Are women really lazy? Or do they just believe that it can’t be THAT hard to be a director on a corporate board if men can do it?

Are women buying the hype because they are taking the same “lifestyle” approach to governance as many women are taking toward entrepreneurship? It’s easy to start a business, but it’s extremely hard to grow a business into a successful corporate enterprise. The same is true of governance. It’s easy to play at being on a nonprofit board, but it is extremely complex and intricate to participate on a sizeable public company board and on their committees.

Do women understand what governance actually is? Have they experienced the need for strategic oversight? Are women willing to delegate certain responsibilities to someone else the task of overseeing their entire business? Do women understand the concept of “moral hazard”? Do they have extensive experience as business leaders? Do they have they the perspective of a solo CEO leading a large, global entity?

There is no doubt in my mind, based on interviews with the women who do serve on public company boards today, that women can understand and perform exceptionally well as public company corporate directors. However, the women who do so did not get there by a quick and easy path. Certainly, many of them did contribute to their communities, cultural interests and colleges by service on nonprofit boards. What distinguishes them from their “wannabe sisters” is that they made it into the corporate boardroom the old fashioned way: they earned it.

Monday, December 10, 2007

More on Nonprofit Governance - 1

We keep hearing from women that the nonprofit path is their preferred path to leadership. The research suggests that that may not be the case for women who aspire to positions of achievement and accomplishment.

The Urban Institute’s Center on Nonprofits and Philanthropy published a new report on nonprofit governance, performance and accountability in 2007.[1] The report had a special chapter on the representation by women on nonprofit boards.

Ninety-four (94) percent of all nonprofit boards have at least one woman director. That is about the same as the S&P500 public companies: 91%, according to Spencer Stuart’s 22nd Annual Board Index. (October 2007).

Nonprofit boards average 46% women, but most women serve on the smaller nonprofit boards: women were 50% of the directors on nonprofits with expenses under $100,000/year but only 29% of the directors on nonprofits with expenses over $40 M. “These findings are consistent with the contention that women are less likely to serve on boards of large and prestigious nonprofits.” [2]

Nonprofit boards which emphasized “financial skills and reputation in the community as recruitment criteria were negatively associated with the percentage of women.” Instead, women tended to favor cultural nonprofits, those in the health field, and those that relied upon endowment funding.

If women want to use nonprofit governance as a stepping stone to a public company board role, then women will need to select larger, more prestigious nonprofits, they will need to pursue those boards that are looking for financial skills and professional reputation, and they will need to take on the leadership role at those nonprofits -– not just join and sit back in the corner and look good.

[1] Nonprofit Governance in the United States: Findings on Performance and Accountability from the First National Representative Study, Francie Ostrower, The Urban Institute’s Center on Nonprofits and Philanthropy, 2007 (page 19)

[2] Ostrower, Francie, and Melissa Stone. 2006. “Boards of Nonprofit Organizations: Research Trends, Findings, and Prospects for the Future.” In The Nonprofit Sector: A Research Handbook, Second Edition, edited by Walter W. Powell and Richard Steinberg (612–28). New Haven: Yale University Press.

Friday, December 7, 2007


As you read the words of Douglas M. Branson, in his book No Seat at the Table: How Corporate Governance and Law Keep Women Out of the Boardroom (New York University Press: 2006), you are likely to get depressed and discouraged if you are an aspiring and talented female in business.

Part I of his book pulls together all of the negative stereotypes as to “why can’t women?” Entitled “Glass Ceilings, Floors, and Walls,” it conveys the physically intimidating sense that women are trapped in some tiny dungeon not of their own making. Mr. Branson asserts that, if women don’t get screwed by the myths from the males, they can count on those from their sisters. He itemizes the offenses from court cases fixing the glass ceiling into place all the way to “bully broads, iron maidens, queen bees and ice queens.”

In Part II, Mr. Branson brings in the “special advice” that promises to assure women a place at the table: mentors, networking, that “special, right, perfect job or career path.” Then he crushes the reader, all again, with his simplistic conclusion that the only women to become corporate board members are tenured professors of Harvard, celebrities or relatives of some corporate leader.

His special weapon is “side-stepping” into the boardroom: taking a career detour away from an apparent unsuccessful route back into the boardroom. As an example, he mentions Aulana L. Peters:

“Particularly fruitful have been sidesteps by women commissioners of the U.S. Securities and Exchange Commission. . . Commissioner Aulana Peters… sidestepped to a major law firm (Gibson, Dunn & Crutcher) and corporate boards at Merrill Lynch (53), Northrup-Grumman (58), 3-M Corp. (105), and John Deere & Co. (106).” [page 105]

This is a good example of why underling researchers should not be counted upon to delve into proxy data unescorted or allowed to reach conclusions without wise oversight and supervision. “Particularly fruitful” suggests that many women have or could use this path into the boardroom. Yet, in the entire 63 year history of the SEC, there have been only 8 women commissioners. Aulana L. Peters was the 3rd and was a Democrat named by one of the most conservative Republican Presidents (Reagan) ever. [1]

Mr. Branson suggests Ms. Peters simply tippy-toed back to a law firm position from her token SEC commissioner role and that, in its entirety, explains why she became a corporate director on top Fortune firms. Mr. Branson and his legal eagles need to go back and look at Ms. Peters’ entire life story where they will find that it is one of skill, experience, accomplishment, endurance, and leadership in every undertaking she approached.

Ms. Peters was born November 30, 1941 in Shreveport, LA. She earned a B.A. degree in 1963, majoring in Philosophy with a minor in science, from the College of New Rochelle, NY -- a Catholic women’s liberal arts college. After college, she was an English correspondent and speechwriter (1965 - 1966) and then an administrative assistant (1966 - 1967) for the Organization for Economic Cooperation and Development (OECD). She married Bruce F. Peters, a medical doctor. She returned to law school and received her JD from the University of Southern California in 1973, at which time she joined the Los Angeles law firm of Gibson, Dunn & Crutcher LLP as an Associate specializing in corporate litigation. She was named a partner of the firm in 1980, continuing to develop a special expertise in securities fraud litigation and accounting liability through her representation of accounting firms.

In April 1984, President Ronald Reagan named her as one of the Democratic Commissioners on the U.S. Securities and Exchange Commission (SEC). She stayed on the commission until July 1988. As an indication of the caliber of her work at the SEC, the Association of SEC Alumni nominated Ms. Peters in 2003 to receive the William O. Douglas Award for outstanding contributions to the development of securities laws and to the SEC community and the financial community.[2] Her 31 speeches as Commissioner demonstrate her willingness to discuss and debate some of that era’s most challenging questions.[3]

After her SEC term, she returned to the law firm of Gibson, Dunn & Crutcher LLP in 1988 where for the next twelve years, she continued as a partner until her retirement on December 31, 2000.

The sequence of board nominations followed her return to the law firm, but they resulted primarily from her years of experience as a highly-value securities litigator, her insight into accounting liability, and her special expertise developed as counsel for auditors and accountant firms. She was espousing tougher new accounting regulations and self-governance within the business boards where she served.

From 1988 to 1996, Ms. Peters was a director of IDS Mutual Funds until it was taken over by American Express Mutual Funds.

She became a director of 3M Co. and 3m Health Care Ltd. in 1990. Two years later, she was named a director of Northrop Grumman Corp. and of Mobil Corp. (where she remained until its merger with Exxon Corp. in 1999).

In 1994, she became a director of Merrill Lynch & Co. Inc., a General Partner of Merrill Lynch Preferred Capital Trust I, II, III, IV, V & VI and Merrill Lynch Preferred Funding I, II, III, IV, V, and VI LPs.

From 1994 to 1997, she was a member of the Board of Directors of the New York Stock Exchange. She was a member of the New York Stock Exchange's Market Regulatory Advisory Committee from 1996 to 1997.

She was a director of Callaway Golf Company from 1996 to June 6, 2001.

In 1997, she was became a member of the Board of Directors of Community Television for Southern California (KCET).

From 1998 to 2000, she was a member of the Legal Advisory Board of the National Association of Securities Dealers. From January 1, 2001 to March 31, 2002, she was a member of the Public Oversight Board Panel (POB) of the American Institute of Certified Public Accountants (AICPA); a member of the Steering Committee for the Financial Accounting Standards Board's (FASB) Financial Reporting Project, and a member of the POB's Blue Ribbon Panel on Audit Effectiveness.

At this point, her expertise as an accomplished accounting and securities litigator was widely recognized. Even though she could have perched atop the POB Panel and preened, she actually testified that, “blue ribbon” or not, her conscience persuaded her that the POB was not the best way to ensure effective oversight of audits. She supported the SEC’s more stringent regulations for auditors and audit work under the new post-Sarbanes-Oxley Act’s Public Company Accounting Oversight Board (PCAOB). It was a tough stance, going against the grain of law and accounting insiders, but it was typical of the courage she exhibited throughout her career. Today, she continues to serve as a member of the U.S. Comptroller General's Accountability Advisory Panel.

In August 2002, she became a director of Deere & Co., serving as a Member of Audit Review and Pension Plan Oversight Committees.

In 2005, she was named a member of the International Public Interest Oversight Board which oversees the standard setting process of the International Federation of Accountants for auditing, assurance, independence and ethics standards.

She has also been a member of the Council on Foreign Relations for a number of years.

“Side-steps” indeed. Ms. Peters career path commenced with a securities law background, was enhanced by a partnership role at a major law firm, followed by selection as an important securities oversight commissioner, returned to a top tier corporate securities and accounting law practice and finally capped by peer recognition of investment fund advisory directorships, corporate boards, professional boards, oversight boards at the national and the international levels.

By trivializing the very substantive contributions made by women directors and women of accomplishment, such as Ms. Peters, Mr. Branson slots women of achievement into tight little boxes of behavior of which he and his ilk “approve.” Mr. Branson suggests that women should do this “side-step” or some similar dance that is different from the performance that every other individual of accomplishment and achievement must follow into the boardroom. Ms. Peters performed “the old fashioned way,” and she made it to the top on the merits.

Mr. Branson is encouraging women to remain tokens, subordinates, victims and otherwise erratic losers in just about every business venue imaginable. One highly revealing paragraph is his statement that:

“men isolate the women (or other token) further by reminding the token of the differences that the men deem to exist. Even if the men do so benevolently, out of a sincere wish to put the women at ease and to treat them appropriately (“let me get that for you,” “that might not be safe for a woman”), the effect is the same. By its actions, the dominant group has demarcated even more clearly the boundary that exists between the token and the group.” [emphasis added; page 117].

No thank-you, Mr. Branson. I choose not to accept your demarcation that such boundaries even exist, let alone limit women of achievement from their highest possible goals. I’d really rather read about the Complete and Real Lives of Real Women like Ms. Peters and how they made it into the boardroom, head held high, eyes forward and proud.


[1] SEC Historical Summary: Commissioners

Women Commissioners of the U.S. SEC:

Carter administration:
Roberta S. Karmel (D) 9/30/77 - 2/1/80
Barbara S. Thomas (D) 10/21/80 11/11/83

Reagan administration;
Aulana L. Peters (D) 6/11/84 7/8/88
Mary L. Schapiro (I) 12/5/88 10/13/94

Clinton administration:
Laura S. Unger (R) 11/5/97 1/25/02

George W. Bush administration:
Cynthia A. Glassman (R) 1/28/02 7/14/06
Annette L. Nazareth (D) 8/04/05
Kathleen L. Casey (R) 7/17/06

and SEC Historical Society Interview with Aulana Peters Conducted on November 7, 2005, by Kenneth Durr:

[3] Speeches by SEC Commissioner Aulana L. Peters: 1984-1987

Wednesday, December 5, 2007

Why Premium Pricing for Women Directors?

Some people are surprised to read The Corporate Library’s findings that there’s a 14% markup on women directors’ compensation. What are the possible explanations?

Paul Hodgson, Senior Research Associate, The Corporate Library reported:

“Our latest annual survey of director compensation found that individual director total compensation rose by a median of just over 12% between 2005/6 and 2006/7. The study, the largest of its kind covering more than 25,000 directors at over 3,200 companies, found that median total compensation was [$104,375 for male board members and $120,000 for female board members]. More than 80 directors earned over $1 million for a single board seat. Data for the 2007 study was based on proxies filed through October 2007.”

Mr. Hodgson wondered what the basis for the 14% differential might be.

“While companies may be clamoring to inject diversity into their director ranks, the reason for the difference in pay likely [cannot] be attributed to competition over qualified candidates, Paul Hodgson says. Generally, basic cash fees and stock grants are similar for a board's members. ‘There's very little leeway given to bumping up compensation for individual directors,’ Hodgson says. ‘You can't offer more to a diversity candidate just because they're a diversity candidate.’”

The Google experience might provide insight. The two women, Ann Mather and Shirley M. Tilghman, receive more than their peers. The first reason might be Google’s policy that “we typically grant equity awards to new non-employee directors when they commence service as a member of our board of directors.” Later arriving directors are benefiting from a higher current value of stock and option awards, while directors named earlier have already cashed out their benefits.

Ann Mather - $1,098,975 in Stock Awards(5); $605,604 in Option Awards(5); $1,704,579 for Total.
(5) Ann Mather held options to purchase 12,000 shares of Class A common stock and 3,760 Google Stock Units.

Shirley M. Tilghman - $888,516 in Stock Awards(7); $431,182 in Option Awards(7); $1,319,698 for Total.
(7) Shirley M. Tilghman held options to purchase 12,000 shares of Class A common stock and 4,800 Google Stock Units.

A second consideration is the specific committee assignments. Many newly appointed women directors are being added as the “financial expert” and are serving on audit committees. Are women more willing to be the “SOX cop” on the board than men?
Director compensation rewards those who are more willing to serve on multiple committees. Are there more women willing to serve on more committees?

At Google, Ann Mather is a member of the Real Estate Committee, is Chair of the Audit Committee and an audit committee financial expert. If Google gives higher compensation to Audit Committee members, and to the Audit Chair in particular, then she would earn that additional benefit. Shirley M. Tilghman is one of two members of the Nominating and Corporate Governance Committee, which does not have a chairman.

A third consideration is competition for scarce resources (diversity on the board). There IS a short supply of women candidates who are able and competent (vs. just “wanna bes”) for board roles. Thus, competition is high for the most valued candidates.

One piece of evidence that there’s a shortage is the “doubling up” phenomenon. When there’s a scarcity, the few resources try to spread themselves thinner over the available demand. The Norwegians are learning this firsthand. After the country mandated that public companies bring on more women directors or else be de-listed, Norwegian firms put women onto multiple boards of directors in order to meet the national requirements. The same “doubling up” practice happened in the U.S. in the late 1970s and 1980s when there were fewer women with the experience to be directors.

Another measure of the shortage comes from executive/director search firms. Spencer Stuart’s 2006 survey of Fortune 200 firms found that 54% of public company boards were searching for women directors; a year later, that percent increased to 70%. But the percentages have not changed dramatically over the past 2-3 years: only about 19% of F200 directors and 15% of F500 directors actually are women.

Since there are few women CEOs (only 26 among all the Fortune 1000 firms), there are few women retired CEOs, so the few of them that exist might encounter increased “bidding up” of their compensation or doubling up of their board assignments.

Other explanations may relate to regional effects: (1) more women have been added to California boards than to firms in other regions, (2) California has a higher than average cost of doing business (3) CA boards may have higher than average board compensation. The first point is shown by our summary of press releases announcing women to corporate boards in 2007 (as reported by Of course, the CA lead could be due to Silicon Valley churning out more new companies on average, or it could be that CA companies churn out more press releases on average.

One final consideration might draw upon another study conducted by The Corporate Library, which found that when compensation consultants are involved in the process, average compensation tended to rise comparatively speaking. If women use compensation consultant more in their negotiations with boards, compared to male directors, that might be an additional explanation.

The compensation study from The Corporate Library gives us lots of food for thought about what’s going on in the women on board marketplace. Most of all, it is quality research like this that compels us to look at the realities of the economics involved, not simply the trivial or token issues and debates that have dominated the matter for the past 20 years.


Director Pay 2006–2007 by Paul Hodgson, Senior Research Associate, The Corporate Library (November 2007)

The Effect of Compensation Consultants: A Study of Market Share and Compensation Policy Advice by Alexander Higgens, The Corporate Library in October, 2007

“Surprise! Women on the Board Earn More: A recent study shows that in corporate boardrooms, female directors actually make more than their male counterparts” by Jena McGregor; November 8, 2007

“Female U.S. Corporate Directors Out-Earn Men: Study” by Martha Graybow; : November 7, 2007

Thursday, November 15, 2007

Paycheck Gender-Think

Tori Johnson has teamed up with Linda Babcock to advocate on behalf of women taking control of their lives – or at least the salary negotiation portion of their lives.

Ms. Johnson did a Good Morning America Behavioral Lab experiment where observers watched men and women negotiate for salaries, based on exactly the same resume, the exact same script – but men AND WOMEN observers gave the job to the men as the more likely to succeed. When women were scripted to be more assertive, they were considered pushy and the B word.

“When asked to explain their responses, the evaluators who were more critical of the woman applicant than the man told me that they're people with opinions just like you and me.”

In other words, these hyper-critical evaluators hid behind the lemming group mentality – everybody does this so it must be OK. Except Ms. Johnson knows that the end result of these destructive cognitive biases is discrimination in the workplace, a 25 percent lower differential in salaries, and chronic poor negotiating behavior on the part of women. Ms. Johnson calls the spade a spade: women are as guilty of this bias and prejudice as men. And that may be the most debilitating bias of all.

“Women -- and men -- must acknowledge that we are all guilty of such biases, whether intentional or not, and must decide that the buck ‘starts’ with each of us. If we catch ourselves thinking, ‘Oh, isn't she demanding and pushy,’ or ‘Isn't she quite full of herself,’ we must call ourselves on it and commit to thinking again. Hold yourself accountable.”

Cudos to Ms. Johnson, whose web site: has some very interesting discussions and advice. Finally: women expecting women to take control of their own lives. How original.


Paycheck Politics: Why Are Women Still Uncomfortable Negotiating for What They're Worth?

Paycheck Politics - Video

Men vs. Women at the Bargaining Table
Many Times Females Settle for Less Than Their Male Counterparts
By Tory Johnson, September 26, 2007

How Avoiding Negotiation Hurts Women
University Experiment Examines Why Women Negotiate Differently Than Men
By Linda Babcock, September 28, 2007

Unequal Pay for Women: April 24, 2007 - Video:

Take Control: How to Negotiate Your Salary: Men Are More Than Four Times More Likely to Haggle Over Pay Than Women by Tory Johnson, April 24, 2007

Is The Wage Gap Women’s Choice? Research Suggests Career Decisions, Not Sex Bias, Are at Root of Pay Disparity, May 27, 2005

Monday, November 5, 2007

Top 50 Women in Business: Ouch!

As you read the articles supporting the Top 50 Women in Business, does this happen to you? You’re cruising along, enjoying the headlines and stories about today’s accomplished women executives and entrepreneurs when – suddenly – you feel your neck yanked to the side as if your scarf got caught under the tires of your car. “Queen Bee Syndrome” is the cause of this jerking: the brief and ever so subtle mention of this catty comment pops up out of nowhere in an otherwise professional article. Back the cart up, Nellie: what was that? That was the “Damned if you do” part of feminist journalism where the woman writer attacks women in leadership by innuendo.

You keep reading, trying to fathom what DOES she mean by that? Does she support the point with evidence or facts? Does she elaborate? Explain? Of course not, because just dropping that phrase should suffice to remind all women who aspire to leadership that they will be painted with this heavy coat of negativism if they dare rise to the top without giving more credit than is due to underlings.

You return to the article, trying to focus again on how the women did it and how you, too, actually might learn something from their experience. Then -– again suddenly -– there’s the other jerking on your neck, pulling you back under the tires. This time it’s the “Work Family Balance” challenge – the other half -- the “Damned if you don’t” part of feminist journalism where the woman writer reminds all women that their first priority should be the babies, the hubby, the house, the parents, and the family. It’s never anybody else’s priority -– just a woman’s: you would never read this paragraph in the middle of an article on male corporate leaders. Dropping these hints are part of the women journalism’s predictable programming us to believe that if women in leadership aren’t focused on personal matters, then those women somehow should be considered “Less than a real woman.”

We’ve been reading this same article for 20 years now. It may no longer have the title “glass ceiling” as it did way back then, but all of the hints, the subtlety, all of the feminist snobbery and innuendo are still there, packed in-between the two Damn You’s!

But where are the Editors? Where is the Writer’s Professional Conscience that is supposed to be sitting at the mark-up table asking the tough questions? Where is the man or woman with the sharp pencil or delete key? How is it that a so-called professional editor allows these games to be played in today’s marketplace? Where is the individual with the intelligence to insist on data, facts or supporting proof of the slur: if or whether “Queen Bee Syndrome” or women’s private lives are relevant to how accomplished women achieved positions of leadership to the left of us, to the right and straight ahead?
And if there is no reasonable support for the innuendo, then remove the slur from today’s articles.

It’s time we started to realize that a woman journalist is not a business professional and certainly not a leader – all she really is doing with this style of writing is standing on the sidelines, selling eye-lash liner ads for the paper. Too bad –- such potential.

Saturday, October 20, 2007

Criteria for Growth and Investment

The number of women-owned businesses are increasing at a faster rate than the increase among male-owned firms and among equally-owned (male and female) firms. This trend creates investment opportunities for small business lenders, such as the SBA. The Los Angeles area SBA office, the largest in the country, has experienced an 85% increase in loans to women-owned businesses over the past year.

The trend also creates investment opportunities for private equity firms – especially those that are also women-owned or those with women are in top management or decision-making positions in the firms.

Yet the challenge is more than women helping women to succeed. The true challenge is in creating, fostering and building viable women-owned businesses out of the hordes of those coming into the marketplace. Just as not all homes are prime market material and not all buyers are prime quality prospective homeowners, so too not all women-owned businesses are worthy investments.

What does make a woman-owned business a viable equity investment opportunity? How do we differentiate the top value potentials from the many wannabes? Here are some guidelines.

The business is in an industry sector that has a high probability of growth and value. A nail salon or day care facility simply is not worth tossing money at – unless and until someone could come up with a viable franchisable business model and/or some pricing model that would pay growth-oriented wages. Let’s face facts here – women search for the Filene’s Basement Deal for their day care centers just as they do for their lingerie. As long as women are only willing to pay bargain rates for their most precious commodities, no pricing scheme is going to be substantial enough to be passed through to the business components. With the cheap customer pricing reality, what is the likelihood of being able to charge a reasonable day care fee and to pay workers a reasonable day care wage?

Most of the businesses entered by women persist in being “of the heart” more than “of the head.” On those occasions where investments were made in healthcare services, such as labor importation of nurses, the business model envisioned serving a highly technical staff shortage where premium prices could recover investments required in the selection, training and certification of nurses. It was not a model based on Mother Teresa serving Skid Row Clinics.

High growth and value sectors today include biosciences, energy-related fields, transportation, finance, construction and technology of all forms and shapes. Not home-services, personal services, clothing, food or any of the myriad “helping professions.”

A second qualification for equity investment in the ability to keep competitors at bay until the business reaches critical thresholds. Proof of concept or proof of market require time and patience, but even more important is the ability to test prices, respond to customers, and fine tune the product without being attacked by competitors. DNA and RNA purification is an example of intellectual insight that could be protected from copying while the business matured its customer base.

By contrast, most women-owned businesses, from scrapbook design to retail or consumer product development, face scavengers immediately upon going into business. Customers copy creative ideas without compensation. Competitors are well-entrenched all over the world.

Protecting the key components of a business idea, through trademarks, patents or exclusive relationships with partners who are willing to refine the product through collaborative efforts – all this provides potential investors with certainty that their dollars won’t be sucked away prematurely.

A third priority is the ability to build a team of supporting and supervising excellence. Successful growth-oriented businesses have begun to build a sales force, a marketing team, and management expertise as the foundation on which the entire company can grow. It is not necessary to complete the entire enterprise, but an organization does demonstrate that the business-woman in charge clearly knows she cannot do this job alone, that she knows how to identify competent support talent, that she can teach them to work together effectively, and that she can lead them from her role as a guide – not Mommy. In short, she needs to demonstrate an understanding and appreciation of the mature organization that she is creating.

When forming a new business, private equity investors say they expect there will be at least 3 crucial people holding the following 5 critical jobs:

o Finance/money
o Marketing
o Operations/technology
o People
o Strategy/leadership

Potential investors will expect to bring more talent to the table. The woman entrepreneur needs to know what complementary skills are required and how they fit into the bigger future.

Finally, before the woman-owned business is entitled to use the financial resources of investors, she must demonstrate a willingness to put her own financial skin in the game. Most businesses need to show that the leadership knows how to leverage her own money before others will trust her to do likewise with theirs. She must fund the start-up initially. She must demonstrate a willingness to face the risks and manage them. If she is not willing to put her money forward, to show proof of concept, it is unlikely that anyone else would be willing to play Prince Charming to her idea of herself. It’s a lot like showing the world that you at least know how to help this baby learn to walk on its own. If you won’t or cannot take it that far, then others are not likely to be will to take over.

When forming a new business, private equity investors say there are four areas of risk to be addressed: product, market, team and financial.

Potential investors are willing to take on those risks right after the woman business-owner has shown that she understands what those risks are and is prepared to deal with them, too.

Monday, October 15, 2007

It's All In Your Perspective

Samuel Clemens (Mark Twain) reportedly said that when he was a teenager, he thought his father was the stupidest man on earth. “When I turned 22, I was astounded at how much the man had learned in just 8 years.”

We see the same maturing perspective when we look at women in leadership. It’s not that they have become wiser. It is we, finally, who are growing up and realizing how smart women really are -- and have been all along. Our perspective has been narrowed by our lack of exposure to the real experiences and life stories of women who hold top positions of responsibility in today’s economy. We don’t know who these women are, what they have experienced, or how they arrived at their current positions.

Too often we simply judge women in leadership by our own shallow horizons. Or worse, we let journalists or “nonprofit research organizations specializing in advocating on behalf of women” tell us how to think, tell us what to believe, and pack our public media with the same limited or biased research findings year after year.

We can view women in leadership -– women on top corporate boards of directors -– through a more focused lens, taking into consideration their entire journey to their current positions of responsibility.

It is no mean feat to be a director on a top Fortune 1000 corporate board today. Yet, we know so very little about the women who accomplished that goal. We know them more as “only the few” or “just a handful” or “barely.”

What is interesting is that they all started as little girls in a family somewhere, chose an education or had it selected for them. Then they did something unique. What was it? It was not one uniform thing for all women. It was a collection of decisions, choices, footsteps one in front of the other, down a path that led to that impressive result: a corporate board seat.

But their lives are much richer than merely that current snapshot in time. They followed one path or maybe more. They progressed and they backtracked. They sidestepped and turned in another direction or leaped over an impeding hurdle. Certainly many other women stopped or left the course – so what made these women persist? What persuaded them to endure?

When you meet these women, they do not look down on you from some high, airy pedestal. They greet you graciously, are genuinely interested in your work and are enthusiastic to tell the challenges they faced and the opportunities they encountered. They are optimists, positive and appreciative of the good people and good fortune that serendipity sent their way. There were no guarantees then, nor any perfectly balanced or chartered course. The mentors they met were tough task masters who expected much of them, first, to test whether they were up to the challenge. The women were worthy, first, and the opportunities followed, in that order.

In the few years since we started to look at women in leadership in the American business marketplace (it’s been just a little over one decade), clearly the women themselves kept learning and growing. Now it is our turn to learn from them … from the outstanding women who serve on top corporate boards of directors in the 21st century.

There is a lot of contemporary history packed in and among the life stories of these women. All we really have to do is be ready to be astounded by how much they have experienced in their brief time upon this stage.

Wednesday, October 10, 2007

No Excuse for Bad Research

What profit a man that he would inherit the world yet lose his soul?

What good does it do women to gain equality of opportunity only by the ruse of bad research? I’m an advocate of women in leadership as much as anyone. I want more champion women on champion boards. But, I don’t want women to advance if the price of that progress is paid in the currency of poor quality economic research.

Elsewhere, we have discussed the “economic miracle” that if companies would simply add a female to their boardroom genetic mix, that somehow they could expect returns on equity, on invested capital or on sales would soar at statistically insignificant rates. Unless, of course, other factors alter the economic brew. Or, unless we have it backwards: that women accept board roles only after their due diligence finds the firm has already increased returns. Or, maybe it’s just a crap shoot, and these things are so blurred that we can’t see the effect for the fuzzy causes.

But, why should we care about serious economic analysis when we’re talking about Women on Boards?? When we debate economic research about women in leadership, the goal is not merely to conclude that “The Results are CLEAR!” or the “Action is REQUIRED!” The purpose of intelligent debate about research on women in the economy is exactly the same as for men: to understand why and how these things occur, to be able to forecast what can be expected in the future.

Co-relation is not causation. Statistics can be significant or not. If the data and the analysis do not support The Case for Women On Boards, then women researchers have to be willing to swallow that whole, go back to the laboratory and figure out what the data does reveal and what the analysis means to a rational male or female person. If the cake don’t bake, then we don’t eat.

Anything short of good economic analysis would constitute reverse gender profiling. That’s as unacceptable as any other profiling or cherry-picking only the data or the people with whom we prefer to associate. We need to know what was the cause, what was the effect and what is the true nature of the interaction? We need to be able to repeat these research findings in the other halls and gatherings in order to ensure credibility for quality economic analysis of women in the business marketplace.

Friday, October 5, 2007

Clearing the Hurdles

Clearing the Hurdles: Women Building High-Growth Businesses (Financial Times, Pearson Education Inc.: 2004) by Candida Brush (Boston University), Nancy M. Carter (U. of St. Thomas), Elizabeth Gatewood (Indiana University), Patricia G. Greene (Babson College) and Myra M Hart (Harvard Business School).

One of the best parts of this book is its willingness to ask the tough questions. For too long, we have heard only the myths and negative stereotypes held out as gospel truth -- it has been discouraging to study women in leadership. The other impressive part of the book is its positive tone: anything is possible as demonstrated by real women in the real world running real businesses very very successfully.

One example of the tough questions is “Are women-owned businesses really smaller on average?” The book, a product of The Diana Project, a multi-year and multi-university study of female business owners and business growth activities, goes beyond the obvious and asks more questions: Why might that have been the case in the past? What does the data tell us? What were contributing factors or motivators?

The five highly-regarded research academicians examine causes in context and in time. Some factors or motivators that might have been valid years ago may no longer be true. And others can be influenced or changed by conscious choices or actions on the part of aspiring female entrepreneurs.

The authors do not simply accept ancient myths as gospel truth for today’s more highly educated, experienced and informed business world. Things change. Women can change things. Women can leap over the hurdles or go around them (whatever is appropriate) rather than just stand there and stare, frozen in time and space. More data provides more perspective on old problems. Sometimes, it is simply a case of presenting the same data in a new or more appropriate framework. The writers are not looking for easy answers: they keep going and probing: “What other explanations might be suggested?”

The second valuable aspect is their citation of real world, real person examples of successful women entrepreneurs. It doesn’t matter that many are not yet Fortune 500-scale public companies. What does matter is that they are approaching the top of the revenue pyramid and that their learning experiences are highly relevant. The women entrepreneurs are willing to be quote for attribution: “This is what I confronted and this is what I did to overcome the challenges I encountered.”

Finally, this is a book for all entrepreneurs – for men and women, minorities and majorities – because when you want to build a business and be among the top 5% in the economic marketplace, at that point the rules, the opportunities, the methods and choices are indifferent as to your color, origins, gender or faith.

Books written by men for the past 555 years have been read by women. The pathway to success is not the monopoly of either gender – in fact, the best business teams tap the best expertise (male and female). Competence is not chromosome-specific.

“Like their male counterparts, women entrepreneurs cannot be lumped into single categories.” [p 164]

It’s such a pleasure to read a book that defines “networking” as something other than bake-sales or silent auctions. Real networking “is the management of all the activities associated with developing and maintaining ongoing relationships [including] repeated interactions and mutual exchange of valuable information and resources. [p. 171]

This book will be among my top recommended suggestions for anyone interested in growing their business to the very top.

Monday, October 1, 2007

Learning From Leaders

From a study of the women who made it to the corporate board room by way of the academic path, very few women made it by staying put. Most had to take leaps of faith to leadership opportunities at other colleges or universities were they were “unknown” and had to prove themselves, on the merits. They “shaped” their risks and their adventures shaped them.

The women did not suddenly appear among the knives, swords, or sabers doing battle in the marketplace. Their lives and experiences honed their talents like a great mallet pounding steel into shape over an open forge.

From the perspective of those who came to a director role by way of a political or government path, the women developed a skill that was valuable to some entity that was struggling with a related issue. Or the entity needed her unique insight and perspective on a problem.

The women didn’t get elected in many cases. They were named to head up commissions, agencies and departments because those organizations were the center of the firestorm of the subject that was their specialty.

In interviews, one male board member said that bringing a woman on their corporate board “lowered the testosterone levels during their deliberations. The other directors became civil”

Another male director described a board that had women directors who then retired. Afterwards, he said, the board was not as effective in the opinions of all the remaining male directors. They were not as focused on business as they had been when there were women on the board.

Another woman was the 1st female on a major bank board. She was asked to chair the board. At her 1st meeting, she realized they were in chaos: all of the directors wanted some say in every single issue under consideration. The woman initiated a committee structure and named a chair for each committee, selecting the most qualified member to head each area of concern. She mandated that the decisions and recommendations had to be made at the committee level before the whole board would review and vote. Committees owned the responsibility of framing the debate and the issues to be considered by the board at large. Only assigned committee members could vote on issues at the committee level.

Every director still attended every committee meeting as before, but the work of the whole organization was raised to a higher level of deliberation and discourse once the accountabilities and processes were put into place.

There's a lot to be learned by talking with the women (and men) on corporate boards that actually have women directors on board.

Memo To Business Editors

Memo to: Editors, Business Newspapers and Journals
In re: How to Write About Women in Leadership


We know most of you know these “rules” by heart, but for those new guys who aren’t quite sure about how to approach press releases from distinguished academics doing research about women advancing to executive positions at major corporations, here is an update to A Crib Sheet: How to Write About Women in Business Leadership.

1. Find a female reporter. Only women will write with the appropriate passion required of this subject.

2. Begin with a lead paragraph that contains one or more (preferably all) of the following “key phrases:” glass ceiling, concrete ceiling, jade ceiling or variations on that theme.

3. Ensure that two-thirds of the article contains the following terms spattered throughout: despite, only, difficult, couldn’t, wouldn’t, breaking in or male-dominated. Emphasize past struggles, especially as a little girl; focus on failures and missed opportunities; look for desperate women strategies.

4. Cite academic research (preferably that which has not experienced any peer review) that “discovers” of “finds” the startling news supporting items 2 and 3 above.

5. Blame the companies for the small pool of available female candidates who might have the education, training or experience required for leadership. Especially chide corporate executive leaders or boards of directors.

6. Interview “experts” from a female advocacy group with the following credentials:

a. Non-profit organization (an absolute “must”)
b. Launched recently
c. “Help” women

7. Leap to another corporate example where family-friendly hiring policies are being implemented. This will help that company recruit women into their low income, low level trainee positions -– the most likely candidate for newspaper advertisement.

8. Close with a quantum leap conclusion: company-provided day-care is a predictor of better-than-peer corporate revenues or share prices.

9. And, most important of all, remember to never, ever, EVER actually describe the education, the hard work, the accomplishment or the achievement of the woman in leadership whose picture you must display prominently atop this article.

Together, we can be sure the mainstream business media continues its decades of socializing women to pursue the lowest expectations careers and avoid the nasty stigma of competitive success.

That’s a wrap! Get me Copy!

Sunday, September 30, 2007

What Would You Attempt?

What would you attempt to do if you knew you would not fail? Doesn’t that message just trigger mental synapses to fire excitedly in pursuit of the possibilities?

Now, flip the statement on its head and feel the difference.

If you were only told that failure, barriers, bias, prejudice, discrimination, and obstacles would litter your path and limit your future, why would you even bother to try?

The latter is the dominant message of the Harvard Business Review articles on women in leadership these days. If we keep telling women they will only fail in corporate America -– just as women struggled one generation ago –- then why would women even bother to pursue the trek up the corporate ladder? If we keep telling women to fear the business world, to be wary of the evils lurking therein, why would they dare to try?

In the post Drew Gilpin Faust Harvard Business School world, we are pulling out opinions from journalists (Hymowitz and Schellhardt, 1986) giving their two decades’ old research the fresh breath of legitimacy or relying upon sociologists (Eagly and Carli, 2001) to assess our contemporary post-Sarbanes Oxley corporate life. Together, they provide a message of a contorted, crushing and concrete ceiling, pressing in on women’s spines and psyches.

Never mind about the data from two decades of progress. Never mind the fact that a woman is The Leading Candidate for President of the United States. Never mind all the progress that outstanding women have made in the intervening years.

Instead, let’s pretty up the same old message and scare the bitches back into the nest:

  • the solo woman is STILL Hestor Prynn
  • it’s only “safe” to go out as groups of women
  • women can’t be real presidents or CEOs, they must be co-leaders
  • the fundamentals of the economic marketplace somehow don’t apply to women: all women are “different” from men, but all women are “alike”: all women think alike and all women choose the same things
  • women always “mother:” help other women, help others succeed, help, help, help, give, give, give, save, save, save everyone else but herself
  • never look at how real women are succeeding and achieving; always look at how women suffer and fail.

    We keep reading that it is always society, culture and the corporations that must change to accommodate the special needs of women. Above all else, change comes not from women themselves as economic actors making educated and informed choices. There “must” be special preferences for women to succeed.

    What could women do if they could see, instead, a message of opportunity, effort, education, potential and personal achievement? What could women do if they saw outstanding female leaders who are succeeding in today’s marketplace – in the 21st century economy – as if they believed they could not fail OR that they would learn from their experiences, good or bad.
  • Friday, September 28, 2007

    CSI: More Than a Crime Thriller

    CSI stands for much more than the television crime thriller. It represents a fundamental trilogy of economic choices available to every individual actor on the marketplace stage. And it applies to women, too.

    You choose what you want to do with the resources available to you. Consume means the short-term satisfaction of perceived needs or wants. Investment means the placement of resources in the hands of some better, probably longer-term, alternative with a probability of giving you back your outlay sometime in the future plus a premium to compensate you for the risky use of your resources. Savings is a deferral of the decision where you have a high security of getting your outlay back and a lesser premium for the wait and risk.

    There it is -- CSI: Consume, Invest or Save. Choose one.

    Women understand consumption really really REALLY well. They do not understand investment or savings as well. As a result, we see more evidence of the economic indicators of women’s prolific consumption behavior and far fewer indicators of either investment or savings economic choices. And women pay the expected price for their decisions.

    Women spend or control 80% or more of our consumer dollars as a nation. We hear a great deal about women’s alleged aversion to risk, yet probably the riskiest resource allocation strategy one could ever chose would be a persistent practice of only consumption.

    Women-owned businesses are dominantly sole proprietorships: earning pittance revenues, but consuming ravenously. Women-owned businesses tend not to be employer firms, thus limiting the potential investment in the labor of others. When women-owned businesses do hire workers, they tend to have a lower average number of employees per firm.

    Women need to learn they have alternative choices to consider; measure the risks and rewards of all the possible choices; evaluate the potential stream of benefits; and choose the next best opportunity compared simply to “eating the crop seed.”

    That expression came from our agricultural heritage and describes vividly the choice families face. They can defer some consumption and preserve some seeds for the next planting season where the potential for a larger crop exists, offering a future where there could be more seed to eat AND more seed to plant for the future after that. But, somebody has to plant the seed: somebody has to be willing to invest in the ground, manage the terrain, and test themselves with nature.

    Is there anybody who really believes women could NOT cut back a little on their consumption and divert something toward either effective savings or investment? What are women afraid of -- that Wal-Mart of Pet Stores revenues might dip? If our economic house is built only upon a flimsy ring-tone house of cards, the sooner we learn this reality the shorter the fall we inevitably will experience.

    The sooner 51% of the decision-makers in the marketplace begin to value the returns from longer-term investments and savings, the sooner we as a nation will reap the benefits of wiser choices about the risks-rewards of viable women-owned businesses. It makes no sense for half the market (women) to continue to spend mindlessly on short-term personal preferences AND at the same time demand that the other half of the market (men) provide them with jobs or mentors or family-friendly programs or flexible work hours or entitlements and advancement and executive positions. Why? Is it simply so that women can continue to support their ravenous short-term consumption behavior? That just doesn't compute.

    Thursday, September 20, 2007

    The Leading Edge

    Women-Owned Million-Dollar Firms by the Center for Women’s Business Research (CWBR), research underwritten by AT&T and KeyBank (January 2004)

    In 2002, the CWBR under Dr. Myra Hart, director, surveyed women owned businesses selected from the Dun & Bradstreet database of publicly-held firms. A total of 278,924 women-owned businesses were identified as earning one or more million dollars a year (5.7% of the CWBR estimated total of 4,893,400 compared to 1.8% of all women owned firms as estimated by the Small Business Administration). Firms solely-owned by women numbered 112,712 (40.4%) and firms equally-owned by men and women numbered 166,212 (60.6%).

    The SBA 2002 data indicates that less than 2 out of every 100 women who opt to go into business for themselves earn 67% of all the revenues. The other women earn far less than $50,000 a year, on average.

    Of the 278,924 women-owned million dollar firms in the CWBR study, 84.4% earned between $1 M - 4.9 M (235,411), another 9.2% earned $5 M - $9.9 M (25,661) and 6.4% earned $10 M or more (17,851).

    Thus, women-owned million dollar firms represented 6.6% of all million dollar firms, and 94.3% of the women-owned businesses earned less than $1 M (or 4,614,480).

    According to the SBA data, million dollar women-owned businesses achieved $5.4 M in average annual revenues per firm by being different from their female peers and more like their male counterparts. Successful women-owned businesses were likely to be in the wholesale trade, construction, manufacturing, and transportation, communications and utilities industry sectors. Successful women-owned businesses were less likely to be in the services and retail trade sectors. That is exactly where smaller women owned businesses concentrate.

    Fifty percent of million-dollar women-owned businesses have a board of directors (about the same as male-owned million dollar firms). The women-owned million dollar firms are more likely than smaller women-owned firms to seek the advice of an external accountant or financial advisor (40.7%), an internal accountant or financial advisor (25.7%), followed by a female mentor (18.3%) or a male mentor (9.3%). Only 13.3% seek the advice of a board of directors.

    Based on these estimates, about 117,100 million dollar women-owned firms have a board or directors. Yet, only about 15,600 actively seek the advice of their board resource.

    Million dollar women-owned businesses are more likely to have a partner (46%) compared to smaller women-owned businesses (22.4%). Of those with partners, 70.3% have 1 partner, 14.5% have 2 partners, 4.3% have 3 partners, and 7.2% have 4 or more partners.

    Of those who partner, 64.7% have a male partner, 21.8% have a female partner and 13.5% have a mixed partnership.

    Of those who partner, 68.4% do so with family members, 17.3% partner with business colleagues, 7.5% partner with friends, and 6.8% have a mixture of partners.

    We have a choice. Looking at the data, do we sit back and “blame” discrimination, male-dominance or other too easy old fashioned targets? Or, for a change, might we say to ourselves -– some women have learned how to build successful businesses? We have the opportunity to learn from them.

    Saturday, September 15, 2007

    How Can I Compete?

    When women ask questions about “how to get on a board,” sometimes it appears as if they are looking for an edge, an out or an indirect -– perhaps easier -– path into the boardroom. It occasionally sounds as if they presume they are not welcome, not competent or not as capable as their male candidate counterparts. Sometimes, it seems as if they believe the “guys” all have some genetic mutation that makes it smoother for them to traverse the difficult terrain to a leadership role.

    They’ve often asked questions such as the following:

  • Do I have to be a CEO or could I be a director without it?
  • Do I have to know the headhunters?
  • Do I have to qualify for boards’ more formal search techniques?
  • Is networking with board members still the key into the boardroom?
  • Are governance courses and director training more important than other education?
  • Do you have to live in the area of a company to be considered for their board?
  • Aren’t women on Fortune 1000 boards “way out there” – in pretty rarified air?

    There’s almost a sense of hopelessness about the question: “How can I possibly compete with ‘outstanding’ women in leadership?” They seem to want another route -– one that makes it possible for average people (“like me”) to achieve such positions of responsibility.

    There’s also the implication that companies should stop looking in that “rarified air” for women of talent; stop putting them on pedestals of high expectations from which they might fall, fail or disappoint. Companies “should” lower their expectations about women director candidates and instead increase the “help” or “incentives” or “encouragement” for more average women in the marzipan layer of middle management.

    Frankly, my dears, there will never be the book entitled “Corporate Governance for Dummies” or “Ten Easy Steps to Become a Director.” Or at least we hope not.

    Women on corporate boards are not necessarily the “superwomen” that some people imagine them to be. They are they same hard-working, persistent, dedicated women that exist everywhere.

    As to the question, “How do I find a corporate board of directors’ role?”
    The answer is this: “You don’t. You build a career of achievement and leadership. When a board needs your skills and expertise, they will find you.”
  • Friday, September 14, 2007

    What’s In It For Me?

    Why do the media and the publishing industry persistently dwell on the negative message, especially when it comes to women in leadership?

    Donna E. Shalala, former Secretary of the Department of Health and Human Services under President Clinton asks about the choices we make ourselves:

    “We need to ask ourselves -— when given the choice and the power to influence girls’ lives, did we choose to have a positive effect or a negative effect or no effect at all? When a girl is looking in the mirror of popular culture today, what will she see? Will she know that her health and future are more important than her image? That the size of her ambition is more important than the size of her clothes? That the dreams she creates for herself are more important than those created for her by others?”

    That was the message from a conference held 7 years ago and reported in Reflections on Girls in the Media, from Children Now's Fourth Annual Children & the Media Conference, August 1997, co-hosted with the UCLA Center for Communication Policy and Stanford University.

    Two questions were at the heart of the conference:

    1. How are females portrayed in today’s media?
    2. Do media messages influence our nation’s girls?

    Reflections on Girls in the Media

    We have not made very much progress since then.

    Today, still, Media Matters ( delights in shaking their sabers about Chris Matthews making stupid sexist comments regarding the looks of a woman news commentator. Women journalists persist in rehashing the same old message about all the many and different ways women can fail: hitting glass ceilings, concrete ceilings, marble ceilings, vaulted or mosaic ceilings. Don’t you just feel physically contorted by their very choice of words?

    What is in it for them? What is their “take away?” What is their motivation for spewing the negatives? What does it benefit them to constantly advocate that women are marginalized, desperate and hopeless? If they make women sound so miserable, is it just to ensure that women will be pitied, favored, pampered, babied, and treated like the princesses they wish they were?

    Who today really believes that the current opportunities for women to achieve leadership roles are LESS than they’ve ever been in the past? Who believes that discrimination, bias or prejudice against women is MORE today than in the past?

    The message matters. The picture that we see and read in our public media is the message we take to heart.

    1. If the market is divided into a small segment vs. a large segment, then the media wants to market to the larger sector of the two. The small share of women on boards means that the larger market is the number of women who are NOT on boards. We have a choice. We could make those women feel bad and discriminated against or we could inspire and encourage them to strive, to excel and to succeed. It’s easier to make women feel miserable.

    2. If Party A has something that Party B does not have, then blame Party A for not sharing. It’s not Party B’s fault for failing to excel. It’s the fault of the evil corporations and executive males for not inviting more women onto their corporate boards.

    3. Those in positions of authority should provide special favors or incentives to those who have not developed or acquired the credentials or capabilities for leadership. Or provide bribes to those who don’t want to participate in the business marketplace or full-time work.

    4. “We all” have a stake in this because “it takes a village” to solve problems that deal with women, but anybody else can solve his own problems all by himself.

    5. Throw out numbers that shock and awe, so you can be confident in using the word “only” to demonstrate suffering, invoke guilt and demonstrate failed expectations for women “only.”

    For example, “only 15%” of corporate board seats might be occupied by women in 2006. Be sure not to cite any statistics that would put that data point into historical perspective.

  • How much of this progress has occurred in recent years?

  • How have boards and governance gone through tectonic change in the brief five years since the Sarbanes-Oxley Act was passed in 2002?

  • How have boards themselves changed: reducing their overall size, adding more women while letting more men go?

  • How is it today that fewer women hold multiple corporate board seats and that more companies than ever before have placed at least one women director?

  • How are corporations reaching deeper into their available top tier of executive ranks to find competent women and diversity candidates?

  • How is it that so many more women, today more than ever before, are qualified by their education and their experience?

  • Is the share of women directors comparable to that of women in leadership in other parts of the economy?

    Women on the Supreme Court (11%), in the U.S. Senate or the House of Representatives (16%), deans of law schools (15%), U.S. Supreme Court law clerks (19%), law partners (17%), Fortune 500 firm general counsel (17%) or Fortune 1000 firm general counsel (16%).

    It's hard work dealing with these tough questions. What's in it for the media? Maybe it's a simple as taking the easy way out.
  • Wednesday, September 12, 2007

    On the Matter of Family

    When I first began my research and examination of women on corporate boards of directors, I discussed the subject with some women in business colleagues. I distinctly remember that dinner conversation.

    “When you interview those women on boards, you be sure to ask them about how they sacrificed their time with their children,” said one of the younger members of the group – who was not even married or had children.

    An older member of the group echoed her thoughts and added emphatically from her own experience:

    “Yeah, you ask them about the guilt they felt from their child when they had to work late. I can’t stand it when my daughter makes me feel that way.”

    Sacrifice? Guilt? Did I really want to probe into the personal lives and choices of women business professionals with these presumptions? Did I want to play Dr. Phil with them? Or Geraldo Rivera or Oprah Winfrey? Would I really want any researcher to bring those presumptions into a conversation with me about my career choices? What right would they have to ask such questions? What would be the benefit or lessons to be learned?

    I felt then, as now, that such questions merely project onto the recipient the preconceived notions of the individual asking the question.

    “Your guilt is your problem,” I felt like telling my women in business colleagues. “You’re looking at the women directors through a biased lens, not on their terms.”

    A business associate told me once about the fact that her previous marriage repeatedly was written up in current biographies of her business accomplishments. Another woman described how the press referred to her as “the current wife” of her husband, as if to suggest there were a host of predecessors or even others that might follow.

    “What’s the purpose in reporting that?” she asked. Indeed, what was the real purpose? It was to place doubt in the minds of the reader. Doubt, guilt, sacrifices made or not made. The perfect soap opera script. Or the perfect Vogue or Cosmo article. Gossip. Rumors.

    I felt then, as I do now, like telling my colleagues, “Grow up! Put away those little girl fairy tales. It’s time to look at today’s women in business as the leaders they are. Look at them through the perspective of 21st century realities.”

    Just to satisfy the lusty inquiries of my women in business colleagues, I didn’t ask the women directors about their families but I did let them inform me as they chose.

    One woman described her two adult daughters (now in their late 40s) as “terrific women” who joined her when she was recently honored with a professional lifetime achievement award.

    Another woman who had two boys late in her career mentioned that the youngest confided to her that he wanted to be a CEO, just like she was, IF boys were allowed to be CEOs too.

    One woman gave birth to her first daughter just as she was taking over as head of a technology firm on the brink of bankruptcy, then let it (with two children) successfully for the next thirty years and sold it for $245 million.

    A woman took another company public just about the time her first child was born.

    Another took time off to adopt a Russian daughter, and then returned to start a new venture that would revolutionize personal communications.

    A woman adopted two boys from war-torn Lebanon, home of her parent’s ancestry; funded a scholarship in their name; and partnered with an associate to form an independent film distribution company.

    One woman heads the private investment arm of a major securities advisory firm and has a family of five children from her husband’s previous marriage.

    Some women cared for ill spouses during both brief and long-term illnesses. Some women chose to exit marriages: for their own reasons. Many re-married; some may not have done so. A few did not marry.

    In short, there is as much variety in the choices made by women directors as there are choices made by women in society as a whole. Their personal lives undoubtedly contributed to what they did and who they became. These women did not allow those personal facts to define them. The women did not, as individuals, allow their personal choices to limit or constrain them. They most certainly did not make personal choices based on guilt, sacrifice, or doubt. They made choices that enabled them to rise to their current positions of influence.

    And that is why they are leaders.

    Monday, September 10, 2007

    Darwin's Finches

    “Low expectations of women can be as destructive as overt discrimination.”

    “Squandering talent is one of the key issues of women in science and engineering.”

    “According to the National Science Foundation, almost no doctoral degrees in engineering were awarded to women in 1966 (0.3 percent), in contrast to 16.9 percent in 2001. And in the biological and agricultural sciences, the number of doctorates earned by women rose from 12 percent to 43.5 percent between 1966 and 2001.”

    “The question we must ask as a society is … ‘how can we encourage more women with exceptional abilities to pursue careers in these fields [of math, science, and engineering]?’”

    Source: Dr. John L. Hennessy (Stanford), Dr. Susan Hockfield (MIT) and Dr. Shirley M. Tilghman (Princeton) in an op-ed piece, “Women and Science: The Real Issue” in The Boston Globe, February 12, 2005

    According to the American Association of University Women’s (AAUW) May 2003 report on Women at Work, 28% of women study in a computer and technology field that will prepare them for work in science, engineering or information technology –- fields “critical to thriving in the new high-tech economy.”

    The solution is not merely to lower the competitive playing field for women, but rather to challenging women to pursue the many possible alternative opportunities available to them. This means that women need to learn all of the possible ways they could compete effectively in the business marketplace.

    Women who rise to leadership roles compete somewhat like Darwin’s finches. In the book, The Beak of the Finch: A Story of Evolution in Our Time (Vintage Press: 1995), Jonathan Weiner described how hungry newcomer finches with smaller beaks would eat the nuts and berries dropped into niches by larger finches that had evolved more cumbersome beaks during the time when they faced no competition. Rather than challenge the established finch hierarchy, the newcomers would feast off the bounty that was available to them because their smaller beaks could reach into the crevices in the rocks.

    Research has identified 6 different paths that women have followed into the boardroom: nonprofit, academic, government, investment/securities, entrepreneurship and the corporate ladder. There is a fair amount of diversity within each of these primary paths. For women corporate directors today, niches include university trusteeships, federal reserve bank boards, entrepreneurial firms, venture/angel organizations and CxO roles or division presidencies at levels just below the traditional “big beak” CEO ranks.

    Over the past eleven years (1995-2006), Catalyst Inc.’s own data shows that the total number of Fortune 500 corporate board seats declined by 638: male-occupied seats account for 861 of those lost seats, while women-occupied seats increased 223, indicating that many women directors successfully identified niches in that old boys’ hierarchy.

    Half of the current (2005) women directors on California-based Fortune 1000 boards were named in 1999 or later. Half are 56 years of age or younger. Just under half of the women on California-based top firms live and work outside of the state, suggesting that boards searched for competent and experience candidates rather than simply settle for home-grown talent.

    Growth in boardroom opportunities for women was matched by increases in the number of women getting top-level educations and their acquisition of business competencies. The women on top California boards earned 1.75 degrees apiece: 116 bachelors’ degrees, 66 masters’ degrees and 35 doctorate degrees. Eight of the masters’ degrees were 2nd masters’ degrees. At least 30 of all of the 66 masters’ degrees were MBAs. Among the women who came by way of the investment/securities path, over 96% had masters’ degrees.

    While many women-on-board advocates look to the boards to do all of the heavy work by recruiting women directors and enticing women with work-family “incentives,” the research about women in leadership suggests interesting alternative lessons about what women, themselves, can do to earn a place at the boardroom table:

    o Pursue a top-quality business education
    o Develop experience in business, finance, investment and governance
    o Expand their awareness of business formation, creation, mergers and acquisition strategies in entrepreneurial and financial management

    And, if barriers to entry still exist among “the big beak” corporate top tiers, then look for value-rich niches in contemporary growth markets at smaller, younger firms:

    o Technology and telecommunications
    o Biosciences
    o International markets
    o Creative finance and investment

    Wednesday, September 5, 2007

    Oh The Poor Little Girls

    Douglas Branson begins his book, No Seat at the Table: How Corporate Governance and Law Keep Women out of the Boardroom (New York University Press: December 2006), with the vignette about the National Organization of Women (NOW)’s Martha Burk objections to the Augusta National Golf Club's exclusion of women. If Branson wanted to learn a little more about “how real women do it,” he might have taken a look at top women corporate directors such as Maureen E. (“Moe”) Grzelakowski.

    “Moe” also saw the challenge of limited play opportunities and “persistent clubhouse rules that exclude women” at golf course amenities. Rather than simply sit back and whine like a poor little girl victim, “Moe” went out and bought her own golf course in Clarendon Hills, IL. Now, she can play golf anytime she wants.

    “Moe” is one savvy businesswoman, drawing upon top executive experience at AT&T, Dell, and Motorola. She sits on the board of Broadcom Corporation, is a senior advisor to Investor Growth Capital Inc. (a venture capital and private equity firm) and still is an active technology consultant.

    The National Golf Foundation estimates that women constitute 24 percent of adult golfers: that is equal to 6.1 million women, with 2.5 million of them described as “core” golfers – equally as serious as their male counterparts. PGA America estimates that the average woman spends about $4,000 a year on direct golf expenditures (e.g., golf fees, lessons, equipment and food and beverages). That does not include indirect expenditures such as golf-related travel and clothing.

    Maybe it’s time we stopped with the “poor little girl” victim mentality, emphasizing how “Women Golfers Still Feel Mistreated,” and instead start to follow the most excellent example of role model “Moe” Grzelakowski who used her business acumen to make one smart investment in something that gave her great personal satisfaction and which also happened to be one brilliant investment: a golf course where “Women Can Feel Welcome” to conduct their business and to spend their money.

    Oh, and by the way, Ms. Grzelakowski also wrote a book entitled Mother Leads Best: 50 Women Who Are Changing the Way Organizations Define Leadership (Kaplan Business, 2005) which examines the positive impact motherhood can have on the leadership skills of senior executive women.

    Saturday, August 25, 2007

    If We're SOOOO Smart.

    U.S. Department of Education's National Center for Education Statistics:

    • Women represented the majority of the enrolled population at undergraduate schools ever since 1978.
    • Women today represent 57.5% of the total enrolled undergraduate population.
    • Women represented the majority of the enrolled population at graduate and professional schools ever since 1984.
    • Women today represent 60% of the total enrolled population at graduate and first-professional schools.

    • Between 1976 and 2005, female enrollment in graduate programs increased 112 percent (from 619,000 to 1.3 million).
    • Male enrollment fluctuated but increased 23 percent overall (from 714,000 to 877,000).
    • Between 1976 and 2005, female enrollment in first-professional programs increased 207 percent (from 54,000 to 167,000).
    • Male enrollment fluctuated but had an overall decrease of 11 percent (from 190,000 to 170,000).

    • Women now make up only about 30% of the enrollment at graduate schools of business in the U.S.

    Council of Graduate Schools:
    The most popular graduate degrees (male and female, combined) are earned in:

    • education,
    • business
    • social sciences
    • health sciences
    • engineering
    • physical sciences

    For doctoral degrees, the most popular field (since the early 1990's) has been:
    life sciences.

    • Women account for 74 percent of education students.
    • Men account for 57 percent of enrollment in business programs.
    • The fields of engineering, physical sciences and business enroll the highest percentages of men.
    • The health sciences, public administration and education attract the highest percentages of women.

    Today, women earn:

    • 67 percent of education doctorates
    • 26 percent of physical science degrees and
    • 18 percent of engineering degrees, according to a federal survey.

    Women are also the majority of doctoral candidates in the

    • social sciences
    • humanities and
    • life sciences, for the first time ever.

    Monday, August 20, 2007

    It is a Supply Problem -- Not a Demand Problem

    There is a disconnect between the demand for versus the supply of women as director candidates on corporate boards.

    According to Julie Hembrock Daum, the practice leader for the North American Board Services Practice of Spencer Stuart, the leading global executive recruiting firm, there was almost a 40% gap between demand and supply for corporate directors in 2006:

    54% of top corporations were seeking women director candidates (S&P 200) yet
    16% of existing corporate directors were women. [1]

    The gap was even larger (47%) for minority candidates: 62% of top corporate boards say they were seeking minority directors, 15% of existing corporate directors were minorities.

    It is not a demand shortage. The problem is not that corporate boards hesitate to bring women directors forward for nomination and confirmation. Since 2000, Spencer Stuart has place 338 women and 192 minority board directors. The firm placed 90 women in 2006 alone (or 23% of all of the new directors added to top S&P 500 firms -- 391).

    There is a supply shortage. The problem is that too few women are making themselves available and that too few women are willing to accept the challenge of service on top corporate boards of directors.

    Some women argue, aggressively in fact, that “it’s all a hoax: the male, pale and stale boards of directors really don’t want women on their boards.” Other women academicians scare their business peers with anonymous surveys concluding that the solo or first female on a board is intimidated and overwhelmed by her male business peers; that it is only when boards reach “a critical mass” of three women directors that they have the courage or comfort to speak their minds, opinions and have a chance to be heard.

    These specious arguments probably do the greatest possible harm by spreading unsupported myths and rumors that discourage capable and competent women from being “willing” as well as “able and capable” candidates for board roles.

    Companies in California lead all other states in their addition of women to corporate boards, according to which tracks press release announcements of women in leadership including those promoted to CEOs, COOs, CIOs, CTOs, CFOs and GCs; other senior executive positions; women in philanthropy, arts and education; women in science and math, and women named to corporate boards of directors.

    In 2006, reported that 278 women were named to corporate boards, of which California firms were responsible for 16% (45) and New York firms had 9.7% (27). For the first eight months of 2007, there were 188 women named to boards, and California firms were responsible for 30% (or 56 women directors) -– about 3.5 times the number nominated by New York firms (16 nominations or 8.5% of the total).

    Recall that the largest number of business cases generated about women in any one year since 1975 was 21 in 2005. The Alfus/Committee of 200 Women Business Case Initiative generated 75 new cases between 1998 and 2003. All told, Harvard Business Online lists only 207 cases with a female protagonist.

    The women who are in leadership positions today at corporate America understand the potential that the business marketplace offers. They understand what is required of the women themselves in order for women to achieve positions of influence and decision-making. There is a tremendous variety of options that the women pursued along their career paths. There are about 1,100 exemplary female business role models serving as corporate directors at Fortune 1000 firms.

    These are business-savvy women. Yet their stories are untold by the academic business case marketplace. We seldom read about these exemplary women in the Mainstream Media.

    The female graduates there are saying, “We don’t want to see superstars” and “I want sessions on fashion, hair and makeup … how to present myself physically for this.”

    The following words are inscribed over the stage at Royce Hall, UCLA:

    “Education is the preservation of that which [society] deems worthwhile.”

    If society is ignoring the lessons from the experience of our top female business leaders, if our media is ignoring the insight to be garnered from these intelligent women, then how will the next generation of young women rise to meet tomorrow’s more demanding global economic expectations?

    The exemplary women who serve on our corporate boards, today, learned about governance the hard way: by their own initiative in an era when few women even knew the meaning of the word governance. Who is better qualified to inform today’s female graduates about the international business environment with its tougher new financial regulations, its stronger expectations of ethical business behavior and its more transparent and public access to internal financial information?

    If we want to increase the supply of women on corporate boards, certainly we need to increase the supply of women in graduate schools of business: women who understand the value of that education and its application and potential in the real world today. If we want to increase the supply of women graduate business students, then a prerequisite is that we face the fact that women need to learn more about

    • how businesses are created
    • how businesses are legitimized and regulated by federal, state and local entities
    • how, when and why businesses create boards of directors
    • what are the appropriate roles and responsibilities of directors
    • what are the resources and knowledge-bases that can be tapped to become educated about boards, directors and their functions

    Have we given these tools and this education to young girls? Have we provided this information to the women who have “opted out” for the sake of their families and children?

    Is it incumbent upon us to hand-feed this knowledge to young women, to make it easy for them to learn it or it is incumbent upon the women to pursue the educational opportunities that are available to all investors in the financial marketplace? Or should today's young graduate women take the initiative to learn from those who did succeed before them?


    [1] Spencer Stuart US Board Index 2006, October 2006

    See also: Spencer Stuart 2006 Board Diversity Report, Julie Hembrock Daum, Tom Neff, Julie Cohen Norris, February 2006