If Not, Why Not?

Recent reports of failing markets overseas remind us that global economies are joined at the hip. What happens in one part of the world impacts what happens in another. The same is true of the Women on Boards movement. Companies in the United States should see European government diversity quotas as a call to action.  They should pay particular attention to what’s happening in the U.K. where quotas are not being considered, but clear guidelines are being suggested.

On Friday we spoke with Henrietta Royle, of the U.K.’s 30% Club, an organization committed to bringing more women onto U.K. corporate boards. Club members are chairmen who work to fulfill the goal and recruit other chairmen to support the mission. To date, 25 chairmen are members of the 30% Club.

Henrietta said that what’s happening in the U.K. is similar to what’s happening in the U.S. “It’s a question of supply and demand,” she said.  “Plenty of supply, no demand.”

England’s SEC equivalent, the Financial Reporting Council, issues governance codes of conduct for public companies. Like SEC rules, companies are required to report on how they apply the codes, confirm whether they have complied, and if not, explain why not.

The FRC is way ahead of the SEC on board diversity. They are considering amendments to the code that would require companies to publish their policy on gender diversity in the boardroom and report annually. The idea came out of the ‘Women on Boards’ report released by Lord Davies last February. The report, commissioned by the government, recommended that company boards aim for a minimum of 25% female representation by 2015. The FRC is now contemplating reporting options.

Keeping Women in the Game

Soon after my daughter graduated from college she called with great news: she was offered a job working for a small law firm. She was thrilled because she was considering going to law school and the experience would be invaluable. In great detail she described the work she'd be doing, what the office looked like, the people she'd be working with, and that she would be able to ride her bike to work. I shared her enthusiasm - it was a great first job. I asked what she'd be earning and there was silence on the line. She didn't ask.

"I meant to ask," she reported. "But it was awkward." My friends reported the same kind of hesitation by their daughters when it came to talking about salary with potential employers. These smart young women assume that if they work hard their employers will reward them fairly.

Not so, according to a recent study by the National Association of Colleges and Employers (NACE) that found that female new college graduates earn 17% less than their male counterparts. Starting salary for a new female graduate with a bachelor's degree in 2010 was $36,451, compared with the $44,159 her male counterpart averaged.

It has long been observed that women earn less than men - about 77 cents on the dollar, based on median annual earnings for full time, year round work according to Catalyst and the Wage Project.

What does the wage gap have to do with women on boards? It's possible that the wage gap contributes to the exodus of women in mid-level managerial positions. Disillusioned with corporate life, women leave to start entrepreneurial ventures or go into the nonprofit sector.  This situation concerns us because it means there will be fewer women working their way up the ranks and the pipeline of qualified women available to serve on boards will not grow.

Say It Ain't So, Urban Outfitters

Imagine my surprise this week when I learned that one of my favorite haunts, Anthropolgie (the source of many birthday gifts for my daughter, family and friends) has no women on its board.  Anthropolgie, owned by the epitome of cool, Urban Outfitters (URBN), is resisting a shareholder resolution encouraging the company to affirm diversity as a corporate value. Calvert Investment Management Inc. and Denise Nappier, Ct. State Treasurer and trustee for the Connecticut Retirement Plans and Trust Funds filed the resolution. 2020 Women on Boards participated in the press conference this week on the issue.

Urban Outfitters has no women (or diversity of any kind) on its board. The company has urged shareholders to vote against the resolution, saying that diversity would restrict the nominating committee and add administrative burdens and cost.

So what's with Urban Outfitters? According to Calvert Investment Management, "Nearly all major U.S. retailers have made major strides to embrace diversity in the board room, making it rare for such a company to take the step of publicly opposing a shareholder resolution affirming diversity as a corporate value."

Has URBN lost sight of the fact that most of its customers are women? Wouldn't the board welcome a fresh, female perspective?

To the board’s point that a search for a woman candidate would have restricted the nominating committee and added administrative burdens and cost, they only have to look at our resource page to learn about firms and organizations that can help them identify qualified women to serve. Some will even do it for free.

The board votes on this issue May 17th. We'll be watching.

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