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Industry Outlook: Human Resources
Women make up roughly 50 percent of the population in Utah. They represent 44 percent of the state’s workforce. Yet few make it all the way up the ladder to executive positions—and even fewer still serve as board members.
In fact, only 8.4 percent of board positions in Utah’s public companies are filled by women, according to our analysis of the top 45 public companies in the state.
But does that really matter? If the best person for the position is sitting in the director’s chair, does their gender make any difference at all?
Research suggests that yes, gender diversity matters on boards.
In fact, the Credit Suisse Research Institute found that over a period of six years, net income growth averaged 14 percent for companies with women directors compared to 10 percent for those with no women directors.
And research released in July by Thomson Reuters suggests that companies with women on their boards enjoy better stock performance.
“Having women on boards has proven time and time again to help companies in their performance,” says Cydni Tetro, executive director of the Women Tech Council and entrepreneur in residence at Disney.
Tetro says the issue of board diversity is often framed as a gender equity issue, “but if you approach it from the social side, you miss the core issue.” And that core issue is economics—it’s the corporate bottom line.
Beyond Token Diversity
Jerry Atkin, CEO of SkyWest, Inc., says it’s hard to put a finger on exactly how board member Peg Billson’s gender contributes to the board’s effective governance. “I can’t point to any single thing that has happened differently,” he says.
Regardless, the SkyWest board intentionally sought out a woman to fill a vacant board position when it recruited Billson in 2006. Billson is president and CEO of aftermarket services for BBA Aviation, a global aviation services provider. With more than 25 years in the aerospace industry, she is eminently qualified to serve as a board member for SkyWest—or any other public company.
Atkin says Billson is a tremendous asset to SkyWest and he is grateful for her presence on the board. He just doesn’t believe that her contributions are colored by her gender.
But he is committed to the idea of gender diversity throughout the SkyWest organization. “We want our employees to know, from the top to the bottom, that we are serious about diversity,” he says. “And it’s real diversity, not token diversity,” he adds, referring to the fact that Billson met all the experience and skill requirements the board was seeking—it didn’t have to lower its standards to find a female candidate.
Nevertheless, Atkin says he believes gender diversity on boards is important, “and I would encourage others to do the same. If we were to lose Peg, we would seek out another female.”
Alison Wistner, director at Mercato Partners, serves on several boards for private companies, including Altitude Digital, Central Logic and Cymphonix. She says gender diversity—as well as diversity of race, age and experience—is vital for optimal corporate performance. Board members should also represent “diversity across the business spectrum—sales, finance, technology,” she says. “You want people who bring different life experiences.”
In a complex, global business environment, she says, “a diversity of thinking” is critical for boards to be able to effectively meet challenges, develop strategies and steer their organizations with a steady hand.
“We always want more women on boards, because it’s simply beneficial for those companies,” says Tetro. “Women are such a force in the workplace today. … There is a lot of benefit to those different skills and perspectives.”
Where are the Women?
When SkyWest starts looking for a new board member, the board first decides what its long-term goals are and what skill sets the new board member will need to bring to the table in order to accomplish those goals. In general, says Atkin, the board wants to find people with “a good deal of experience in a higher-level position in a public company,” someone who has made capital and labor decisions—and preferably a CEO.
Ten to 15 years ago, he says, there just weren’t any women who fit those qualifications. When the board recruited Billson in 2006, it found a handful of women. Currently, “we just are in the process of another board search … and there were a number of women on the list,” says Atkin. “It is improving a lot.”
Atkin’s experience speaks to the idea that, well, there aren’t many women on boards because there aren’t many women who are qualified to serve. They just aren’t out there.