Ceiling

Cautious Optimism
The percentage of women in corporate leadership is small, but inching forward.
REFLECTIONS
In the four years they’ve conducted research for The
Minnesota Census of Women in Corporate Leadership,
St. Catherine University associate professors Joann Bangs
and Rebecca Hawthorne have seen less progress than
they’d like in the percentages of women serving on the
boards or in the executive suites of the state’s largest
public companies.
The good news: A growing body of research supports their
view that greater gender diversity makes good business sense.
The following is culled from interviews with the professors.
Why should corporations care about gender diversity?
It’s a business issue, not a women’s issue. Studies in the
United States and in the European Union have identified
higher returns on equity and total returns to shareholders
from companies with a high representation of women
corporate directors. And organizational innovation
has been demonstrated to increase when at least three
women are in the boardroom.
What’s the good news in the 2011 Census data?
Minnesota’s percentage of women executive officers
continues to lead the nation. We’ve seen a rise in the percentage
of women executive officers from 15.2 percent in
2009 to 17.4 percent in 2011. This rise happened while
the raw number of executive officers dropped. This suggests
a positive trend, which we find hopeful for women
in corporate leadership.
Is there a correlation between the number of female executives
and the number of female directors in companies?
Research indicates a positive association between women
corporate directors and the number of women on companies’
leadership teams. You can assume that women
achieving top levels have experience that prepares them
to be directors. The pool of female talent is broadening
and deepening.
What particular experience are companies seeking
in directors?
As women are moving into leadership roles they are
demonstrating operational P&L (profit and loss) experi-
Increase Board Diversity
Look for executives in the nonprofit sector.
Identify talent from within the company.
Use a search firm to recruit board members.
ence, and that is a key criterion for board service. Not
coincidently, many women serving on Minnesota boards
are chief financial officers.
What will help women achieve more executive
and director roles?
The role of the CEO is critical. He or she must make
diversity a visible goal through strategies and methods
of accountability and integrate those throughout the
corporate culture. Companies need to define for themselves
the value of more women as employees, customers
and leaders.
Why aren’t more women recruited for
corporate boards?
When boards are looking for board members, they typically
look for someone with board experience. The traditional
director is a retired or active CEO. Few women
have reached the CEO level so few women have gained
public board experience.
What will jump-start women’s stalled progress?
Internationally, there is a lot of movement toward quotas
and regulations. Quotas aren’t likely in the United States
— nor would we argue for them — but the Securities
and Exchange Commission (SEC) requires companies to
tell shareholders how diversity factors into their nominations.
However, the SEC has left it up to each company
to define diversity as it wishes.
How can companies become more inclusive?
Diversity and inclusion need to be embedded through
all the policies and practices of a corporation to create
an inclusive culture. It’s not enough to bring women
on board. We have to engage them and allow them to
impact governance.
LEARN MORE View this year’s report online, as well as the past three years of The Minnesota
Census of Women in Corporate Leadership, at mncensus.stkate.edu.
Resources for Information
Bilimoria, D. (2006), “The Relationship Between
Women Corporate Directors and Women Corporate Officers,”
Journal of Managerial Issues 18.1 (spring), 47.
Catalyst (2007), “The Bottom Line: Corporate Performance
and Women’s Representation on Boards,”
www.catalyst.org.
Deloitte (2010), “Diversifying the American Board:
Thought Leaders Collaborate on Current Challenges and
Practical Solutions,” www.deloitte.com (Board Diversity
Report, a PDF).
Ernst & Young (2009), “Groundbreakers: Using the
Strength of Women to Rebuild the World Economy,”
www.ey.com/groundbreakers.
Hay Group (2010), “Report of the 2010 Best Companies
for Leadership Study,” www.haygroup.com/
bestcompaniesforleadership.
Kang, E., Ding, D.K. and Charoenwong, C. (2009),
“Investor Reaction to Women Directors,” Journal of
Business Research 63 (2010), 888–894.
Kramer, V.W., Konrad, A.M.& Erkut, S. (2006), “Critical
Mass on Corporate Boards: Why Three or More
Women Enhance Governance,” Wellesley Centers for
Women, Report No. WCW 11, www.wcwonline.org/
pubs/title.php?id=487.
Matsa, D. and Miller, A. (2011), “Chipping Away at the
Glass Ceiling: Gender Spillovers in Corporate Leadership,”
The American Economic Review, 101 (3), 635–639.
Terjesan, S., Sealy, R. and Singh, V. (2009), “Women
Directors on Corporate Boards: A Review and Research
Agenda,” Corporate Governance: An International Review
17(3), 320–337.
Torchia, M., Calabro, A. and Huse, M. (2011), “Women
Directors on Corporate Boards: From Tokenism to
Critical Mass,” Journal of Business Ethics 102: 299–317.
Credits and Contributions
The 2011 Minnesota Census of Women in Corporate Leadership
was produced by St. Catherine University and the
Minnesota Women’s Economic Roundtable (MWER).
• Co-chairs: Paula J. King, Ph.D., dean of the School of
Business and Leadership, St. Catherine University; and
Pamela A. Wheelock, member, MWER
• Researchers: Rebecca Hawthorne, Ph.D., associate
professor and director, Master of Arts in Organizational
Leadership (MAOL), St. Catherine University; and
Joann Bangs, Ph.D., associate professor of economics
and MAOL, St. Catherine University
• Research assistants: Kimberly Popp and Cassandra
Sawerwein, MAOL graduate students
• Editor: Amy Gage, director of marketing and communications,
St. Catherine University
• Research and editorial coordinators: Maha El-Wailli,
communications specialist, St. Catherine University;
and Valerie Krech, MAOL program coordinator
• Writer: Elizabeth Child, principal, Elizabeth Child &
Company
• Special thanks to Marjorie Mathison Hance, vice
president for external relations, St. Catherine University,
and Deborah Hopp, vice president of publishing,
MSP Communications, and member, MWER
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