Up until about the 1970s and 1980s, for every 100 people we trained in business and law school, about 90-95% of the graduates were men. Possibly half of them, at some point in their careers, went on to become entrepreneurs who built businesses, perhaps even took those businesses public, and built a board of directors. Most of them tapped that same pool of educated businessmen and lawyers to serve in the boardroom.
Today, in the 21st century, for every 100 people we train in business and law school, probably 50-55% of them are women. Half of the 45-50% of male graduates might still build businesses, go public and build a board of directors. But, what of the majority who are now women graduates? What percentage of those women go out and build a business at some point in their career? What percentage of those who build a business take that enterprise public and sell shares to investors at large? What percentage of that subgroup builds a board of directors?
Census data tells us that less than 3% of women-owned businesses in the
reach the threshold of $1 million in revenues per year. (Currently, that means about 117,000 firms.) Women’s organizations which survey women-owned businesses estimate that about 13.6% of these top dollar firms even have a board of directors. U.S.
As men build boards of directors, they acquire the governance experience needed to help other businessmen chart a strategic long-term growth trajectory. If women are not building businesses, not building boards of directors for their businesses, then where will women acquire the governance experience they need to serve? If the 50-55% of business and law school graduates are not building boards or hiring board members, shouldn’t we expect that the total supply of potential director board seat opportunities would decline? This is exactly what the data indicates.
A new priority for 21st century women is to examine this challenge.