Saturday, October 31, 2009

The Boston Club

The Boston Club, Massachusetts’ covey of women executives and directors, issued on October 30, 2009 their latest report on the state of women in leadership in The Bay State. If that didn’t scare the next generation of women back into the kitchen, nothing will.

As is typical of these reports, the 2009 study cites "a troubling trend" about "women losing ground" in their quest for a match made in heaven -– a corporate board or executive role at a Top 100 Firm in Massachusetts. The members-only nonprofit continues the 13-state harangue against companies whom they argue are the sole source of the angst in corporate America. According to The Boston Club, it is the fault of all those "pale, stale, ancient males" who continue their "zero-zero" strategy of excluding the most promising women from the executive suites and from the boardroom. They echo their sister organizations’ lament about the tragedy of the "static" and "flat" trends.

First, we should remind the researchers in Bean-Town that we have been in a horrific recession since the 3rd quarter of 2007. Most economic data describing the last two years' activity typically reported declines of 30 to 50 percent all the way to triple digits downward. So, if women on board data reveals merely a flat trend, then that would suggest that women in leadership at that level did not lose out, comparatively speaking.

But, the data holds many more treasures that the researchers have overlooked in their enthusiasm to strafe male-dominated corporations. Fact No. 1: since Boston began surveying the state’s Global 100 firms in 2001, 18 women were added to boards even though the number of male occupied seats declined by 12. Fact No. 2: The number of "zero" firms (those with no women directors) declined by 10. Fact No. 3: The number of firms with three women directors increased by 4 (from 5 firms to 9 firms). Fact No. 4: Four women are CEO/Chair of the companies where they serve as directors -– no small achievement. And, for those who wish to stay current, Fact No. 5: Massachusetts added 9 new women corporate directors to top corporations in the first 10 months of 2009, alone, according the press release announcements tracked by NewsOnWomen.com

The dot-com bust of 2000-2001 and the subsequent years of financial stupidity wreaked havoc on Boston’s Top 100 firms, suggesting the local economy has not exactly been risk-free. Turnover of firms on the Boston 100 (due to mergers, acquisitions, relocations, and revenue declines) has been high. Almost half of the firms (a total of 49) left the Boston 100 since 2003 alone. This makes comparisons very difficult.

From-To Firms Leaving
2003-2004    11
2004-2005    6
2005-2006    6
2006-2007    11
2007-2008    11
2008-2009    4

By 2009, The Boston 100 list included 37 new companies which were not on the list in 2003. Almost half of these new, young businesses (17 firms) had 1, 2 or 3 women directors for a total of 23 women in leadership. (Nineteen firms had no women directors.)

The biggest concern of these women-on-boards advocacy groups should not be at the board level, where women ARE holding their own. We should be much more concerned about the chilling, negative effect their reports have on the next generation of young, aspiring women "in the pipeline" who are trying to decide if they want to come up the executive ranks into leadership roles.

If I were a young woman in business school today who was repeatedly hit with this depressing, discouraging commentary from my "senior sisters," I would not be encouraged to stay on course for a leadership positions as I did back when I was in B-School. And back then, you could feel and taste bias and prejudice against women’s advancement -– today, those would be grounds for a lawsuit.

In 2001, when The Boston Club first began issuing their reports, they found 133 women executives among the total of 794 executives (or 17%) at the state’s top 100 firms. In 2009, they found 60 women executives out of a total of 679 (8.6%) or a decline of 73 women "in the pipeline" on track to leadership compared to a decline of 53 overall. This is the true "critical challenge" facing women.

In 2001, the survey of CEOs at the Boston Top 100 firms spoke of 3 critical imperatives for board qualification:

1. profit and loss experience
2. functional expertise
3. visibility to other CEOs.

The Boston report suggests that women are leaving corporations in large numbers to start new entrepreneurial businesses. In December 2009, the Small Business Administration will release their findings from the nation-wide survey of women-owned businesses which will provide us tremendous insight into this arena.

For example, are today’s young women retreating to viable businesses or are they swarming to uneconomic hobby/lifestyle choices (such as table-scaping, scrap-booking, restaurants, fashion, nail and hair salons)? Are they building real businesses to address substantive economically-sound challenges of the global 21st competitive marketplace?

Are today’s young women preparing themselves for the challenge of executive leadership? Or are they just retreating to the perceived belief that nonprofits will give them greater personal satisfaction? Is their service mentality financially- and economically-sustainable for women, today, during at career which potentially will span more than 4 decades?

Are women-owned businesses paying their fair share of society’s taxes, wages, pensions, and health insurance? Are they hiring their share of workers and executives, themselves? Or are women-owned businesses simply not-for-profit entities that provide personal satisfaction, but do not cover resource costs and only exist at the behest of charitable donations or public grants?

Are women entrepreneurs growing their firms, attracting shareholder investments, building their own boards and including women directors on their on boards? Or are women simply hoping that men will do all the really hard work alone?

In 2009, the Boston report shoots all of the "critical imperatives" at the companies and their failure at succession planning and "finding" women. Nothing is said about how or whether women in the pipeline are acquiring P&L experience, functional expertise that would be of value to boards, and/or whether women are making themselves visible in today’s more competitive and global marketplace.

Nevertheless, if anyone were to evaluate the credentials of the women directors and executives in Boston, as listed in the appendices, they would have no question whatsoever that these talented women understand the challenges and have stepped up to meet them.

It certainly would be nice to read more about these women of achievement and the paths they pursued to their leadership roles. Who knows how inspiring that might be to the next generation of young women who might follow them to the very top?

Thursday, October 22, 2009

Laurentian Bank Leads

Laurentian Bank, in Montréal, leads Canadian banks (and probably U.S. banks as well) with 5 women among 13 directors.

"Montréal, October 21, 2009 – Mr. L. Denis Desautels, Chairman of the Board of Laurentian Bank, is pleased to announce the appointment to the Bank’s Board of Directors of Ms. Marie-France Poulin, Vice-President of Camada Group, an enterprise specialized in investment and acquisition of mid-sized companies. With this nomination, five of Laurentian Bank’s 13 directorships are now held by women, constituting the strongest female representation in all of the Canadian banking industry."

See their press release for a description of their experience and competence. Truly outstanding women in leadership.

Friday, October 16, 2009

The Shriver Report

The Shriver Report: A Woman’s Nation Changes Everything is a 454-page report which opens with comments by Maria Shriver and closes with an epilog by Oprah Winfrey.

The most insightful part of this document is the chapter by Suzie Orman, beginning at page 232: Money Matters. Ms. Orman’s most sage advice certainly upstages all the other wish lists and candy-cane dreaming of the other chapters:

"Until women accept the need to make themselves a priority, they will continue to struggle to find their way in the new world order."

Ms. Orman echoes the advice of Eunice Shriver, whom Maria Shriver quotes, but whom she apparently does not understand:

"Use adversity to give your life purpose and mission," Eunice Shriver told her children. "Turn your adversity into advantage and opportunity."

Instead, Ms. Shriver’s introduction is a litany of complaints that, in summary, says: "Momma’s not happy:"

"I learned women are hungry for something that’s missing in their lives—a place to connect.

  • They say they feel increasingly isolated, invisible, stressed, and misunderstood.
  • They say the news media, where I’d worked for 30 years, don’t accurately reflect their lives anymore.
  • They say women on TV shows and in the movies certainly don’t either.
  • They can’t believe how out-of touch government is with who women are today and what they need to survive.
  • They can’t understand how slow business has been in figuring out how to retain, support, and promote women.
  • They lament that many faith institutions want women to be volunteers, but won’t give them a seat at the table, let alone a place at the altar.
  • They’re terrified how quickly their family finances could be wiped out by a child’s catastrophic illness or a parent’s Alzheimer’s.
  • And they’re exasperated that pundits and pollsters continue to jam women into convenient boxes with labels like 'soccer moms' or 'security moms.'"

So, first of all, A Woman’s Nation is one bitchy nation.

Part 1: The Economic Setting describes the "new world order" that exists now that women constitute almost half of the workplace. What the report does not address is all those other economic sectors where women have represented over half the headcount for years: the teaching profession, the healthcare profession, and the real estate profession. If those sectors represent what happened when women become the majority, that should speak volumes about what we can expect now that women represent half the workforce overall.

"At one level, everything has changed. And yet so much more change is needed. This report contemplates what a new America should look like after we finally embrace this important new dynamic in our lives and the changes it has caused in our homes and businesses."

Ah yes, once we "embrace" the new world order, everything will change. Whose fault is all this malaise? Part 2 places the blame squarely on all The Institutions: Government, Immigrants (??), Health, Education, Business, Faith (??), and Media -- all of those evil things that have to change to accommodate A Woman’s Nation. They’re all to blame, except of course Faith, which provides women with a safe harbor. Yeah, right, as if faith-based initiatives really helped women get the equal pay they deserved or protected them from being overused free labor. Faith institutions are charity-based, where women find comfort and solace in an otherwise ugly profit-oriented world. "Get thee to a nunnery!"

Part 3 is Let the Conversation Begin: Men, A Man’s Viewpoint, A Woman’s Viewpoint, and (of course) Marriage. So after all the above research and data, it still comes down to what women want out of their marriage -– more help.

"Business owners and political leaders have been getting a free ride on the backs of women, taking advantage of their unpaid and underpaid labor. We will have a women’s nation when: Our laws, public policies, and social institutions make it possible for women and men to move readily between these two realms (work and family)."

Ok, do I understand it correctly? All we have to do is change all the laws, public policies, and social institutions so women and men can move freely between work and family, and THEN women can expect equal pay for equal work.

Part 4 is The Latest From the American People (a survey of 3,413 adults.) including deep-dish questions such as, "Are you confused about the way men and women are supposed to interact these days."

And Oprah Winfrey wraps it all up for us. Ms. Winfrey who is the one who presents woman after woman bemoaning their horrible lives on daytime television, advocating on behalf of diets, beauty treatments, shopping until we drop, and young girls’ beauty encampments --- way over there in Africa. SHE cites Sojourner Truth -– one woman among many who put herself where her values were: on the front line of leadership. Sojourner Truth truly was a woman of courage willing to make change happen by the work of her own hands, not simply whining that "others" do something first.

Friday, October 9, 2009

The Nonprofit Market

CharityBrowser.com provides some statistics describing the size of the nonprofit marketplace. For the year 2006, they list a total of 1.4 million nonprofits in all 50 states plus the District of Columbia. That compares with the U.S. Census (2004) estimates of 25.4 million firms of which 5.9 million were firms with employees and 19.5 million without employees. About 4.4 million were small firms with 10 or fewer employees.

So, when board advocates are advising women to serve on nonprofit boards as a place to acquire top level governance experience, they are talking about a very small market. For every 1 nonprofit there are another 19 small businesses. For every 1 nonprofit, there are 4.5 small businesses with employees. For every 1 nonprofit, there are 3 firms with up to 10 employees.

Board of director positions at Fortune 500 firms total about 5,500 seats (assuming 11 directors each) and, at the next tier of Fortune 501-1000 firms, there are about 3,000 seats (assuming 6 directors each). That is a total of 8,500 director positions at Fortune 1000 firms. The Census reports a total of 17,000 firms with 500 or more employees. Assuming an average board size of 8.5, that would represent approximately 136,000 possible director seats (over and above those on the Fortune 1000). Even assuming that not all large companies have boards or have boards that size, we’re still talking a huge number of board seats.

CharityBrowser.com reports that just 7 states are home to 45% of all nonprofits. California leads with 134,000; followed by New York (88,000), Texas (83,000), North Carolina (71,000), Pennsylvania and Illinois (each with 59,000), Ohio (58,000) and Florida (56,000). Nevertheless, nonprofits in these most active states hold only $2 million in assets and $1.5 million in revenues on average.

Thus, there is no support for the expectation that board oversight of finances at nonprofits would be comparable to the multimillion dollar asset and revenue profiles of top corporations. Only the very largest nonprofits would be responsible for revenues of over $100 million. However, there are fewer than 260 such nonprofits among the top 7 states. New York leads with 78, while California has 69. No other state has even 40 nonprofits at that scale.

For those who thought it was hard to get onto a major corporate board, it looks like even that would be easier than getting on a top nonprofit with a comparable scale of financial responsibilities.

Monday, October 5, 2009

Myth-Busting in Chicago

Many women’s organizations bemoan the lack of women directors and report same in Censuses such as The Chicago Network has conducted for the past ten years. We would interpret the data as a glass half full and filling up fast.

The Chicago Network reported that, over the past ten years (1998-2008), Chicago’s top 50 public companies added 16 women directors, rising from 61 women in 1998 to 77 in 2008 (a 10.1% share rising to 15.0%). Not only did the number of women increase, but this happened in the same timeframe that the total size of corporate boards declined by 90 members, and the number of men on the boards also declined by 106 men. The average board size went from over 12 members to just over 10 members. To my mind, that is pretty good progress.

A common belief is that nonprofit board experience translates into for-profit board preparedness. It’s not necessarily so.

The Chicago Network surveyed nonprofits from 2005 through 2007, but stopped doing so in the 2008 census. In 2005, they surveyed 35 nonprofits, and 30 each in the latter two years.

Average board size for nonprofits was about 3 times that of for-profit corporations in Chicago. Nonprofit boards averaged 44 members per board in 2005, 60 in 2006, and 56 in 2007. It may be somewhat easier to get onto a nonprofit board, but it also likely to be more difficult to excel while on a nonprofit board. Working among 50 or so other nonprofit "committee members" to get substantive, productive results is far more complex than the work on a corporate board of 10 people, which is the average size of Chicago’s corporate boards today.

Interestingly enough, over the period 2005 to 2007, the number of women on nonprofit boards declined by 20 (maybe due to the change in the sample from 35 entities to 30). By contrast, the number of men serving on Chicago’s top nonprofit boards increased by 149 during the same period. Thus, women now hold an average of 20.6% of nonprofit board seats and 15.0% of for-profit board seats. The margin between the two is narrowing from both ends.

The number of women serving as executives on nonprofit entities also declined from 90 in 2005, to 40 in 2006, and 42 in 2007. The total number of executives declined from 249 to 141, and the number of men executives also declined from 159 to 99.

The real story is that women are taking on more top leadership positions in a variety of for-profit companies in Chicago and throughout Illinois at large, medium, and small firms. The increasing number of women executives, preparing themselves for leadership positions along many paths to success, means that we are beginning to reach into that 100% of the educated talent pool which includes women.

What is so impressive, though, is to break out the list of the names of women directors and executives from The Chicago Network's report: one-hundred and thirty-eight women are in top leadership positions at the top 50 Chicago corporations. Again: that is 138 individual women!

Wouldn't it be nice, for a change, instead of focusing on the "magic number" (the percentage share of seats occupied by women directors), if we would start to focus on the individual women who have achieved these incredible positions of leadership?

See: The Chicago Network Annual Census (2008) : http://www.thechicagonetwork.org/