Over the last year, there’s been a lot of noise about the lack of women at the executive level. Sheryl Sandberg, COO of Facebook, is talking about it, major newspapers and publications are writing about it and news outlets are creating dedicated sections on their websites to the issue. But what are the real numbers, and what’s the business impact of having multi-gender boards and female executives? How can having women at the top can lead to greater business success and growth?
Recent industry research has made a strong business case for increasing the number of women in executive positions and on boards, linking companies with female representation in top positions with better overall business performance.
In fact, gender-diverse boards boast a 53% higher return on equity, as well as stronger stock market growth, as compared with companies that have mostly male representation in top positions.
The reasons for such exceptional numbers in female-led companies are based on some recent statistics: Women make 85% of household purchasing decisions, and they hold 51.5% of all management and professional positions and 51%of the nation's private wealth. Furthermore, a 2010 Booz & Company study dubs women "The Third Billion," inferring they are the next global economy.
Despite this, the "UC Davis Study of California Women Business Leaders: A Census of Women Directors and Executive Officers,” paints a very different picture. The study tracks the presence of women executives in C-level and board director positions at the largest 400 publicly-held companies headquartered in California. According to the study, women comprise only 9.2% of the 1,925 highest-paid executives in these 400 companies.
Reasons for underrepresentation of the female demographic in these roles is puzzling, especially given the industry statistics proving success among female-led businesses. Women remain conspicuously absent from the top echelons of business and still represent a significant minority on boards. Even more troubling is the majority of California’s leading public companies lag in terms of assembling boards and executive staffs with appropriate diversity of gender, race, and overall life experience.
What measures can we take to grow the numbers of women leaders and leverage them as a critical resource for business success? Shining a light and learning from companies making progress toward gender equality in executive ranks and on boards is the first step toward change. The Davis study reported that fashion retailer bebe stores (NASDAQ:BEBE) was ranked No. 1 on the list for two years straight, with 40% of top positions held by women. Retailer Wet Seal (NASDAQ:WTSLA) made a meteoric rise to tie for No. 2 from No. 400 in 2010, with women holding 36.4% of director and highest-paid executive positions. Additionally, Wet Seal announced a female CEO in January 2011 and enjoyed steady growth all year, including a 3.9% increase in third-quarter net sales over the prior year period, according to a recent Zacks Equity Research blog.  A coincidence? I think not.
In order to truly change the numbers, women need to remain vigilant and adamant about forging new pathways to the top. Women need to find sponsors, evaluate their network to see if it will help them achieve their career goals, and take advantage of board development programs. By helping companies build up their diversity initiatives, by providing a forum for connecting and networking, and by collectively strategizing how to increase representation of women on boards, we press on in our efforts to move the needle- by even a single percentage point.
Marilyn Nagel joined Watermark as CEO in 2011, leading strategic initiatives designed to help exceptional women in the Bay Area enhance their personal and professional impact. Prior to joining Watermark, Marilyn was Chief Diversity Officer (Inclusion and Diversity, I&D) at Cisco, where she led the global I&D team on projects that require large-scale change management, talent planning, and learning. Watermark is a community of female leaders in the San Francisco Bay Area, whose vision is to increase the representation of women at executive levels to drive innovation, human development and economic growth. In an effort to increase the number of women leaders, and thereby help companies improve their profit margins, Watermark created the Watermark Institute Board Access™ Program. The program is designed to assist women in advancing their presence in business management, C-level offices and on boards.