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Study by Bentley and The Boston Club Says Massachusetts Companies Missed Opportunities to Place Women in Boardrooms in 2006
November 14, 2006
The percentage of women holding seats on the boards of directors of the 100 largest public companies in Massachusetts increased from 9.9% in 2005 to 10.8% in 2006, according to a study for the Boston Club by three Bentley researchers. But analysis of board turnover among 94 companies that were included in both the 2005 and 2006 reports concludes that corporate leaders largely ignored the pool of talent among senior business and professional women to fill those vacancies.
Two Bentley professors and an executive-in-residence at the Women's Leadership Institute at Bentley concluded in the 2006 Census of Women Directors and Executive Officers of Massachusetts Public Companies that the period from July 1, 2005 - June 30, 2006, was a year of "missed opportunities" to add women to the boardrooms.
The Bentley study, produced in partnership with The Boston Club and Mercer Human Resources Consulting, was presented on November 14 at the Fairmont Copley Plaza by Bentley Associate Professor of Management Susan Adams on behalf of her co-authors Patricia Flynn, Trustee Professor of Economics and Management, and Toni Wolfman, executive-in-residence at the Women's Leadership Institute at Bentley.
"The report essentially debunks the myth that companies aren't placing women on their boards due to a lack of openings," says Adams. "In fact, almost 9% of the current directors in these companies were appointed in the past year, when there were almost 71 vacancies."
Among the 94 companies that were included in both the 2005 and 2006 Census reports, there was a high rate of board turnover during the year ending June 30, 2006.
The Percentage of New Directors Who Are Women is Low
Unfortunately, few of the 38 companies that added new directors took advantage of the opportunity to elect women to their boards. In particular:
On the other side of the coin, the directors who left the boards of these companies during the past year were virtually all male. The 31 independent directors who retired or resigned were men, and only one of the 16 retiring insiders was a woman.
According to co-author Flynn, the fact that the number of women on corporate boards has hit double digits is cause for optimism, especially since there has also been an increase in women among the most highly compensated executive officers of the 100 largest Massachusetts companies.
"The large number of independent directors who have reached the age of 70 or have served more than 15 years on the boards of the 100 companies means that there will likely be many vacancies in the next few years and thus opportunities for significant change," Flynn notes.
In that regard, co-author Wolfman points to the positive examples set this past year by companies such as Avid Technology, Boston Scientific and Eaton Vance.
For example, when it added a fourth woman director, Avid became the first large Massachusetts public company with a board on which women comprise a majority. Boston Scientific also ended the year with four women directors by electing to its board the two women directors of Guidant Corp. upon its acquisition of that company. And Eaton Vance, which previously had an all-male board, elected two women directors over the course of the year. Wolfman hopes other companies in the technology, life sciences and financial services sectors will follow suit and further diversify their own boards.
The 2006 Census concludes that there is cause for "guarded" optimism that there will be "fewer missed opportunities" next year and beyond. For example, the number of women who chair the nominating committees of the 100 Massachusetts companies increased from seven to ten, a second female CEO was elected, and there were again seven women who serve as board chairs or lead/presiding directors.
For a copy of the full report, please click here.
Firm Size Makes a Difference:
Industry Also Makes a Difference:
Special Analysis: Board Turnover (Based on the 94 companies that are included in both the 2005 and 2006 Census reports.)
Women Executive Officers:
Directors and Executive Officers:
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