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IES 34 ORGANIZATIONS AUTUMN 2013 STANFORD BUSINESS BOUNDAR GENDER Paths to Power Research explores what’s changed for women on boards of directors, and what hasn’t. BY DAVID LARCKER AND BRIAN TAYAN THE WORLD TODAY Percentage of companies with zero, one, two, or three or more female directors North America Western Europe EEMEA Latin America Developed Asia Emerging Asia 20% 40% 60% 80% 100% 3+ 2 1 0 Corporations today show great interest in increasing female representation on their board of directors, and female director numbers are rising. Yet women represent only a fraction of directors at publicly traded companies around the world. To better understand this, we surveyed the companies on the 2012 list of the Fortune 250 to identify their first female director, the year she joined the board, and her previous experience. We found that the first female directors of large public corporations had diverse backgrounds, while the mix of professional experience among female directors today is quite different, with a strong shift toward a corporate career path. Why is female board representation not higher? In one recent survey, women cite male-oriented networks as the number one reason. Men cited a lack of female executives at the top of corporations. Δ THE PIONEERS First female directors of select Fortune 250 companies LEADERS TODAY The first female director in our sample was Clara Abbott of Abbott Laboratories, who was the wife of founder Wallace Abbott and served two terms on the board from 1900 to 1908 and from 1911 to 1924. 80 % 5 % 7 % Of female directors today, 80% have corporate executive experience, only 7% have a consulting or legal background, and just 5% come from academia. 41 % THE PIONEERS 41% of the first female directors of select Fortune 250 companies had significant prior business or executive experience. 1910 1920 1930 1940 1950 1960 1959 1934 1911 PepsiCo Coca-Cola Abbott Laboratories Infographic by Brown Bird Design

35 THE WORLD TODAY Female corporate board representation by country UNITED STATES 14.0 % BRAZIL 5.1 % UNITED KINGDOM 12.6% FRANCE 18.3 % NORWAY 36.1 % GERMANY 14.1 % Only 17% of women on boards in the United States are independent directors. Norway passed a law in 2003 requiring that listed company boards be at least 40% female, with full compliance by 2008. INDIA 6.5 % RUSSIA 4.8 % CHINA 8.4 % JAPAN 1.1% LEADERS TODAY Women represent 26% of newly elected independent board directors. 26 % LEADERS TODAY Only 14% of executive officers in Fortune 500 companies are women. 14 % 17 % 14 % THE PIONEERS 17% of the first female board members had professional consulting or legal backgrounds. The first female directors of two power companies in our sample were environmentalists. In 1973, Doris Leonard joined Pacific Gas & Electric. In 1977, natural history writer Ann Zwinger joined American Electric Power. 9 % 30 % THE PIONEERS 9% of first female directors were company founders or members of the founding family. Wal-Mart’s first female director was Hillary Clinton, a patent infringement and intellectual property lawyer, and wife of then-Arkansas Governor Bill Clinton. THE PIONEERS 30% of first female directors had meaningful state or federal political experience. THE PIONEERS Approximately 14% of first female directors gained their seats because of academic or research experience. 1970 1980 1990 2000 2010 2003 1994 1991 1986 1977 1975 1973 1969 Berkshire Hathaway Land O’Lakes Johnson Controls United Health Group Wal-Mart American Electric Power Chevron Bank of America Lincoln National Prudential Financial The Gap