Women, Minorities Make Little Progress In Gaining Seats On Corporate Boards

By Jeff Swiatek
The Indianapolis Star.

It’s a man’s world.

That’s a fair description of most board rooms at Indiana’s larger public companies.

Women hold only 14.2 percent of board seats at the 26 public companies in Indiana that have a market capitalization over $500 million. But they make up more than 50 percent of the state’s population.

The female board presence in Indiana lags the national rate of 16.6 percent of board seats occupied by women at the 500 largest public companies on the Fortune 500.

RELATED: Who’s on Indiana’s corporate boards?

Six of the 26 largest Indiana public companies, in fact, have no women board members at all.

They are Calumet Specialty Products, Interactive Intelligence, Remy International, Republic Airways and Allison Transmission, all of Indianapolis, and Franklin Electric of Fort Wayne.

The largest Indiana corporate board with no women is Allison’s nine-member board.

A spokeswoman for the transmission maker, Melissa Sauer, didn’t provide a comment on the lack of women on the company’s board.

Allison has been public for only two years and during most of that time has been majority-owned by two private-equity firms that essentially control five of the nine board seats.

Corporate boards in Indiana and nationally also are predominately white.

Public companies have been called on to increase the percentage of African-Americans on boards. Nationally, that percentage fell from 7.6 percent in 2010 to 7.4 percent in 2013 for Fortune 500 companies, according to the Alliance of Board Diversity.

About a third of the 250 largest public companies don’t have any African-Americans on their boards, according to Black Enterprise magazine. Similar statistics were not available for Indiana boards.

The most diverse corporate board in the state is probably Eli Lilly and Co.’s, with four women and three ethnic minorities among the 14 current members.

The global drug maker “believes diversity is an important factor in board effectiveness,” said Lilly corporate secretary James Lootens. He said the board aims for “diversity in the broadest sense, including persons diverse in geography, gender, ethnicity and experiences.”

The low percentage of women on corporate boards also remains an issue even after more than decade of effort by women’s groups and others to persuade public companies to appoint more women to their boards.

Ann Murtlow, president of United Way of Central Indiana, said women get overlooked for board service partly because many lack experience as senior managers, compared with men.

Murtlow, who served on four for-profit boards last year, said her background as a chemical engineer, former president of Indianapolis Power & Light, and a fellow in the National Association of Corporate Directors has helped make her attractive as a board candidate.

Murtlow said women add value to boards by bringing “diversity of experience and perspective that allows for debate on important issues before decisions are made.”

While some European countries mandate women on public-company boards, U.S. companies face nothing but public pressure to appoint more women. Proponents aren’t making much headway.

“It’s not just that the numbers (of female board members) are low, but that the numbers are stagnant,” remaining in the mid-teens for the past eight years, said Kerry Goodenow, associate in corporate board services at Catalyst, a New York-based nonprofit group that promotes women in the workplace.

Catalyst last year created a job bank of several hundred women who have experiences that make them board-worthy. It offers up its list to companies seeking to stock their boards with more women. So far, dozens have consulted the list, Goodenow said.

Goodenow thinks the hurdle to getting more women on corporate boards lies in persuading boards that it’s important to get female perspective on issues — and can be to a company’s financial benefit.

A Catalyst-sponsored study from 2004 of 353 companies in the Fortune 500 showed that those with the highest representation of women in top management experienced 35 percent higher return on equity during the study period of the late 1990s than companies with the lowest women’s representation.

“It’s good business to have more women on boards,” Goodenow said. But “if people are not making this a priority and putting an emphasis on it, it doesn’t just happen.”

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