Fortune 500

Notice to the Z Companies - You're on the List.

Part of the 2020 Women on Boards strategy is to educate corporate stakeholders about why board diversity – and gender diversity in particular – is important. We’ve been meeting with influencers and speaking at events to get the word out. Reaction to the campaign has been tremendous with the number of supporters growing daily.

In keeping with our campaign strategy, this week we notified 41 companies that they are on the 2020 Zero “Z” list. The full list will be published on our website in January. We’re asking the “Z” companies to take the “2020 Challenge” and announce their intentions of adding women to their boards, with a commitment to reach the 20% benchmark by 2020. 

According to our research in the 2010 Fortune 500 public companies, there are 143 “W” companies, 126 Very Close or “V” companies,  150 Token or “T” companies and 41 “Z” companies.  

In the 13 Fortune 500 companies in Massachusetts, where we’re based, only 10 women are needed for all the companies to get to 20%.  For the 52 Fortune 500 companies in New York all they need is about 50 women. To the question about whether there are enough qualified women to serve, we know we can come up with the names of 60 women in Boston and New York. These companies could also look nationally and internationally.

Congrats to 304 Winning "W" Companies

Last week we mailed out 304 congratulatory certificates to CEOs of winning "W" companies - public and private companies whose boards are comprised of 20% or more women. We want these senior executives to know that the public applauds their board diversity policies and pays attention to the issue.  We also emailed the PR and IR executives at the companies to apprise them of the honor. The names of the companies can be found on 2020wob.com in our "W" company database.

The 2020 database is the cornerstone of our campaign. The database includes companies on the Fortune 500; ION's 2011 report of companies in 14 U.S. regions; and private and other companies that self-report. In September we will have concluded our research on the 2010 Fortune 1000, which will be our benchmark for the duration of 2020 Women on Boards campaign. Look for the launch of the 2020 Index this fall.

Why are we doing this?  Peter Drucker said, "What gets measured gets changed." When it comes to board diversity, he was only half right. Lots of organizations have measured the number of women who serve on the boards of public companies, but the number has been stuck at 11% for years, according to ION. The 2020 Women on Boards campaign takes the initiative a step further. Through our grassroots efforts we are contacting these companies and letting them know that people care about board diversity. This outreach is especially important as we begin to track the zero "Z" companies that may change their policies because of public pressure. We'll be publishing that list in January 2012.

The Proof is in the Numbers

We are often asked for stats reflecting the benefits of putting women on corporate boards, so we were delighted (but not surprised) by the results of Catalyst's latest report on corporate performance and women's representation in the board room. The short story: Companies with women board directors (WBD) outperform companies with few or no women board directors.

Catalyst analyzed financial data for 524 companies reported in the Fortune 500 between the years 2005 - 2009. Performance measures included Return on Sales (ROS), Return on Equity (ROE) and Return on Invested Capital (ROIC).

According to Catalyst, companies with the most women directors (on average, 25% WBD) outperformed those with the least (on average, 4% WBD) in two areas, ROS and ROIC.

Catalyst also compared financial performance for companies with 3 or more WBD (48) with those with zero WBD (24). Companies with sustained high representation of WBD (3 or more in at least four or five years) out performed companies with sustained low representation (zero WBD in at least four of five years.)

ROS  by 84%

ROIC by 60%

ROE  by 46%

The proof is in the numbers. It’s time for a new definition of board diversity: 20% or more women directors. Companies that maintain the status quo - all white male boards - run the risk of being left in the dust.

 

To see the report, go to: http://www.catalyst.org/file/445/the_bottom_line_corporate_performance_and_women's_representation_on_boards_(2004-2008).pdf

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