Women’s organization wants diversity to influence how shareholders vote on company resolutions
A group of Boston area female professionals has launched a grass-roots campaign to raise the proportion of women on corporate boards across the US to 20 percent or greater by the year 2020.
2020 Women on Boards (WOB2020) is the brainchild of Stephanie Sonnabend, CEO and president of Sonesta International Hotels Corporation, who suggested the idea to female colleagues last spring while discussing the ‘dismal’ results of a survey of board membership at the 100 largest companies in Massachusetts.
The survey, released by the Boston Club, an organization for high-achieving professional women in the region, revealed the number of women directors on public boards in Massachusetts has remained at 11 percent since 2006. The average was about 15 percent among Fortune 500 companies in 2009.
‘After mulling it over, Stephanie suggested that what was missing was a grass-roots component,’ says Malli Gero, a Boston area PR executive and the principal and founder of Gero Communications. As a result, WOB2020 was launched and Gero stepped in as executive director.
Borrowing a page from the green movement to raise public awareness of the issue, Gero says that beginning in 2012, WOB2020 will identify companies with no women on their boards by listing them as ‘Z’ companies on its website. ‘In 2011, we will write to as many of them as we can to inform them of the impending Z database. It will be up to consumers as to whether or not they patronize the companies,’ Gero explains.
The group will also publicly identify W companies: those with gender diversity either increasing or hitting the 20 percent target. ‘[As] people understand the lack of diversity, they may be more inclined to vote their proxy differently,’ Gero says. The group decided on a more populist approach after the Boston Club had tried working with CEOs and other senior executives, but saw board makeup change only slowly or not at all, she explains.
While the focus is on firms in Massachusetts, Gero says WOB2020 hopes to take the grass-roots approach nationwide through the InterOrganizationNetwork, a coalition of 14 regional organizations representing women in business.
The group intends to go beyond posting lists of companies on its website by reaching out through social media and public speaking in an effort to ‘tell young women getting their MBAs why they should care’ about board diversity.
Gero points to recent research reports from Catalyst, an organization focused on increasing opportunities for women in the workplace, and from the Oklahoma State University, which both show a positive link between gender diversity on boards and financial performance. ‘Diverse boards provide better thinking on complex issues,’ Gero states.
One of the biggest hurdles may be boards themselves, according to a recent survey of nearly 400 board members by executive recruitment firm Heidrick & Struggles. It finds 65 percent of women board members believe increased boardroom diversity will help restore trust in corporate America following the market meltdown, compared with only 35 percent of male board members.
