Women in positions of power have a lot less trouble than men at finding other female executives for key roles, according to an analysis of 1,000 U.S. corporate boardrooms.
When women hold key leadership posts like chief executive officer or board chairman, companies have women in more than 27 percent of director seats, compared with less than 18 percent when men are in charge, according to a study released Monday by the advocacy group 2020 Women on Boards. The group wants women to hold at least 20 percent of all board seats at U.S. companies by 2020, up from 17.9 percent now. Almost 90 percent of businesses led by women already meet that goal.
“Women-led companies are doing better in the gender diversity on boards than male-led companies, but in general we’re also seeing a better level of women serving on boards,” said Malli Gero, co-founder and president of 2020 Women on Boards. “When you have a woman on the board, they are going to be able to help find more women.”
Companies are under increasing pressure to create more diverse boardrooms, particularly by adding women, to reflect the makeup of the workforce. There’s also mounting evidence that it’s good for profits. Morgan Stanley added to research supporting that thesis when it said last month that companies with more women in the ranks had better returns and lower volatility. Women make up almost half of the total workforce and about 4.4 percent of CEO jobs in the Standard & Poor’s 500 Index.
“Men tend to know men in their network and don’t know how to reach out and attract those additional women,” Stephanie Sonnabend, also a co-founder of the group, said Monday in a Bloomberg Television interview. “I don’t think companies want mandates. What we do need is more men to get involved in this issue and realize it is a profitability issue, not just a women’s issue.”
Last week, pension funds with more than $1 trillion in assets under management issued an open letter urging companies to increase the number of women, minorities, and lesbian, gay, bisexual and transgender people on their boards. The letter, signed by treasurers from 14 cities and states, including California, Massachusetts and New York, pointed out that men hold 80 percent of the board seats at companies in the S&P 500.
In the letter, the group said that only 32 percent of male directors considered gender diversity to be very important, citing consulting group PwC’s annual survey of directors.