Why are women still in the minority on CT companies’ boards?

Why are women still in the minority on CT companies’ boards?

This month, companies across Connecticut and the rest of the country have prominently featured women professionals in many events and marketing campaigns.  

While the observance of Women’s History Month every March marks a time when many firms tout their progress in recruiting and supporting the career advancement of women, most large companies still lack women in key positions. Among the 15 Connecticut-headquartered companies on the 2022 Fortune 500 list of the largest U.S. corporations, women comprise a minority on nearly all of those organizations’ boards of directors — an imbalance that could affect how those businesses deal with a number of important issues affecting their workforces. 

“When you have different types of people, you’re less susceptible to groupthink,” Laura Field, a professor of finance at the University of Delaware, said in an interview. “It’s good to have people in there who might question things and say, ‘Why do you always do it that way?’ If you don’t have someone who’s different, they might not ask those questions.”

Underrepresented in the boardroom

In the past few years, a number of women have been appointed to seats on the boards of Connecticut’s Fortune 500 companies.   

But stark disparities persist. Stamford-based Charter Communications, the provider of Spectrum-brand cable, internet and phone services, has only one woman on its board of 13 directors. Kim Goodman, who also serves as chief executive officer of Smarsh, a digital communications firm focused on compliance and intelligence, is seeking re-election this year to Charter’s board — as are all 12 of the board’s male directors.  

In response to an inquiry from Hearst Connecticut Media about why Goodman is the only woman on its board, a Charter spokesperson declined to comment beyond referring to a section of a “proxy” filing this month to the Securities and Exchange Commission.  

“In 2022, the (board’s) nominating and corporate governance committee continued to develop its pipeline of potential diverse director candidates in the event an opening occurs on the board of directors, with the expectation and plan that the next opening would be filled by a woman candidate with the exception of a Liberty Broadband or A/N nominee or the company’s chief executive officer,” reads part of Charter’s filing. 

Liberty Broadband is Charter’s largest shareholder, while A/N refers to another large shareholder, Advance. Executive Chairman Tom Rutledge, the company’s previous CEO, has agreed to serve in his current position through Nov. 30, at which point he is scheduled to step down from that role and the board. Current CEO Chris Winfrey is set to be appointed to the board by Dec. 31. 

Among Connecticut’s 14 other Fortune 500 companies, the number of women directors ranges from two to four. Total seats on those boards range from eight to 12.  

Greenwich-headquartered warehouse operator GXO Logistics is the only company among Connecticut’s 2022 Fortune 500 representatives with a board where women constitute 50 percent of the membership. Four of its eight directors are women. 

GXO declined to comment on the representation of women on its board. 

Women are also underrepresented in board leadership roles. Only three of the state’s Fortune 500 firms have a chairwoman — toolmaker Stanley Black & Decker, escalator-and-elevator manufacturer and servicer Otis Worldwide and consumer financial services firm Synchrony. Farmington-based Otis’ chairwoman, Judy Marks, also serves as its CEO and president, while Stamford-based Synchrony’s executive chairwoman, Margaret Keane, served as the company’s CEO from its 2014 spin-off from GE until 2021. Keane is scheduled to retire from the board next month. 

“At Otis, we place great emphasis on diversity across multiple dimensions in the workplace. Our fundamental strength stems from the contributions made by the multiple cultures, skill sets and experiences of our team members — and our board is no exception,” Abbe Luersman, Otis’ chief people officer, said in a written statement. “Our board intentionally reflects the world in which we live. In fact, diversity is specifically identified among the criteria considered by the board as it evaluates qualified candidates.” 

The lack of women directors reflects infrequent openings because of many board members’ long tenures and the limits of many companies’ professional networks, according to Field. 

“It’s not something where you apply for it, and they pick the best person. When they approach someone to become a director, they’re basically saying, ‘We want you on the board,’” Field said. “Networks are really important, and women don’t always get involved in those networks. To the extent that (companies) can put a bigger net out there and rely on executive-search firms to help them identify women (candidates), I think that would help.” 

Efforts to increase the number of women board members

During the past few years, companies in the U.S. and a number of other countries, have faced increasing pressure to increase the number of women and other underrepresented groups on their boards. 

In 2018, California became the first state to mandate that companies include women on their boards. The law required publicly held companies headquartered in the Golden State to have one member who identifies as a woman on their boards by the end of 2019. By January 2022, boards with five directors were required to have two women, while boards with six or more members were required to have three women. 

But a state superior court judge ruled last May that the law was unconstitutional because, she said, it violated the right to equal treatment.

Despite the ruling, supporters of the California law have praised it for improving women’s boardroom prospects. Among other states, Washington passed a similar measure in 2021, and legislators in Massachusetts, New Jersey and Hawaii have proposed similar bills. Illinois requires publicly traded companies headquartered in the state to provide reports on their boards’ demographic diversity.  

Among changes in other countries, the European Parliament adopted last year a European Union law on gender balance on corporate boards. By 2026, companies would need to have 40 percent of the “underrepresented sex” among non-executive board directors, or 33 percent among all directors. 

In Connecticut, the General Assembly has not passed legislation requiring corporate boards to meet diversity targets. But a number of elected officials are vocal supporters of private-sector initiatives such as Paradigm for Parity, a coalition focused on closing the gender gap in corporate leadership positions. Paradigm for Parity’s members include several of the Connecticut-headquartered Fortune 500 firms, including Cigna, Frontier Communications, The Hartford, Otis, Stanley Black & Decker and Synchrony. 

“Women in leadership positions in government and women in leadership positions at large corporations can help each other because the more Mary Barras (CEO of GM) and Judy Markses we have, the more women as United States senators and governors we’re going to have,” Lt. Gov. Susan Bysiewicz, who also serves as the chairwoman of the Governor’s Council on Women and Girls, said in an interview. “We still have a long way to go in both areas, but I think the more women there are running large companies, the more accustomed people will become to seeing women leaders in government.” 

By having more women on their boards, companies might be better positioned to take on a number of workplace issues. The lack of women executives is one concern that boards can tackle, given that boards select companies’ CEOs. Otis’ Judy Marks is the only woman serving as chief executive of a Connecticut-headquartered Fortune 500 company

In addition, since the rise of the #MeToo movement a few years ago, a number of women’s rights advocates have said that having more women holding board seats and executive positions could help reduce sexual harassment and discrimination in the workplace.    

“In the #MeToo generation, where we’re very concerned about things like sexual harassment, to have an all-male board is kind of tone-deaf,” Field said. “And if you have female board directors, the company is more likely to be thinking about the younger women in the company and bringing them up through the ranks.” 

pschott@stamfordadvocate.com; twitter: @paulschott

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