Where Are the Women? Minnesota’s top companies bypass opportunities for transformational change. By Rebecca Hawthorne, Ph.D., and Joann Bangs, Ph.D. Slight improvements Racial diversity in Minnesota board appointments presents an area of limited progress — two additional companies added women directors of color to their boards in 2011. Sixteen women directors of color currently serve across 14 Minnesota companies. They hold 2 percent of the available board seats across Minnesota’s 100 largest publicly held companies. No Women on Board Minnesota companies that include no women corporate directors or women executive officers (Section 16b) on their corporate leadership teams include the following: Aetrium Inc. Angeion Corp. Company John J. Pollock* CEO Gregg O. Lehman EXECUTIVE SUMMARY Rebecca Hawthorne, Ph.D. A lingering financial crisis has illuminated the results of poor corporate governance — high-risk investments, shortsighted decision making and a narrow view of stakeholders. Despite the documented benefits to improved governance gained by appointing women to corporate leadership roles, little has changed across the state of Minnesota. A limited number of senior executive women serve on the corporate boards and work in the executive suites of Minnesota’s largest 100 publicly held companies. The 2011 Minnesota Census of Women in Corporate Leadership reveals squandered opportunities and uneven progress in diversifying Minnesota public company corporate leadership over the past year. Squandered opportunities Fifty independent directors were appointed to corporate boards governing Minnesota’s 100 largest public companies in 2011. Only five of the 50, or 10 percent, of new independent directors appointed in Minnesota were women. Each of these 50 appointments represented a unique opportunity to gain competitive advantage by diversifying a board through the appointment of a highly qualified woman. Joann Bangs, Ph.D. Research shows that increasing gender diversity on corporate boards by appointing women directors improves board ability to fulfill both control and strategic responsibilities. And yet in Minnesota, the total percentage of new board seats awarded to women in 2011 was 10.4 percent of all available appointments, a precipitous drop from the 19.4 percent of new appointments secured by women in 2010. Minnesota companies continue to squander the competitive advantage of diverse governance. The net result: no progress. Women continue to hold 14.2 percent of the board seats of Minnesota’s 100 largest publicly held companies. The percentage of women corporate directors has not noticeably changed since the Census began collecting data in 2008. Only 14 percent of Minnesota’s top companies have any women directors of color. Nineteen of the state’s top 100 public companies have no women on their boards or in their executive suites. Given the evidence-based business case for diversity in the boardroom, the documented public acceptance of women in corporate leadership roles and the highly qualified pool of candidates, the lack of progress is striking. And, it can be remedied. Nationwide, women directors of color comprise a very small percentage of corporate directors, topping at 2.9 percent. The 86 Minnesota companies with no women directors of color offer great room for improvement. On a more positive note: Minnesota companies showed significant progress in 2011 in the increase of women executive officers (Section 16b). Women hold 17.4 percent of the available executive officer positions, an increase of one percentage point over 2010. This percentage reflects both an increase in the number of women executive officers as well as a decrease in the total number of available positions. The economic recession has impacted company hiring at all corporate levels, and the “mancession” — a trend of higher unemployment among men than women — is reflected in the Census data. Despite the loss of executive officer positions, the total number of women executive officers increased in 2011. Eight companies reported a net increase in women executive officers in 2011. This encouraging trend suggests progress in diversifying corporate leadership teams — at least in the executive suite. Leading the Way Target Corp. is one of only two Minnesota companies — the other being MTS Systems Corp. — that has achieved Special Distinction status on the Honor Roll (see page 14) for all four years of the Census. Gregg Steinhafel, Target chairman, president and CEO Broadview Institute Inc. Digi International Inc. Digital Angel Corp. Electromed Inc. Image Sensing Systems Inc. Insignia Systems Inc. IntriCon Corp. Lakes Entertainment Inc. MOCON Inc. Multiband Corp. Nortech Systems Inc. Northern Technologies Intl. Corp. Rimage Corp. Rochester Medical Corp. Stratasys Inc. Jeffrey D. Myhre Joseph T. Dunsmore Joseph J. Grillo Robert D. Hansen Kenneth R. Aubrey Scott F. Drill Mark S. Gorder Lyle A. Berman Robert L. Demorest James L. Mandel Michael J. Degen G. Patrick Lynch Sherman L. Black Anthony J. Conway S. Scott Crump Winland Electronics Inc. In transition as of June 30, 2011 WSI Industries Inc. Michael J. Pudil** *Replaced by Joseph C. Levesque on November 28, 2011 **Replaced by Benjamin T. Rashleger on January 1, 2012 That means 30 percent or more of its executive officers and 30 percent or more of its corporate directors are women. “At Target, diversity is an all-in commitment that extends from our sales floor to our boardroom,” says Gregg Steinhafel, Target chairman, president and CEO. “We believe diversity, including gender diversity, is vital in understanding and serving our guests and in making Target a great place to work. We’ve consciously developed a diverse, independent and balanced board and executive team, with strong women directors and executives whose perspectives are invaluable to Target.” EXECUTIVE SUMMARY 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. 2 APRIL 2012 MINNESOTA CENSUS OF WOMEN IN CORPORATE LEADERSHIP MINNESOTA CENSUS OF WOMEN IN CORPORATE LEADERSHIP APRIL 2012 3