My entire working life, roughly 50 years, I’ve been hearing the same old excuses for women not advancing in corporate America. Two are dominant: “we can’t find qualified women,” and “just wait until the pipeline gets filled and things will automatically get better.”
If the pipeline can’t fill in half a century, how long will it take? Corporate America, particularly in the boardrooms where the big decisions are made, is still very much an old boys’ club.
Years of prodding by individual female shareholders, women’s groups, and other advocates have shown us that begging and moral suasion aren’t enough. According to a recent Financial Times article, in 10 years the proportion of women board members on Fortune 500 companies has barely crept up from 12 to 15 percent, and 60 of those corporations have no women on their boards at all. Even in California, a state that is generally viewed as progressive, female directors in the largest companies hold a paltry 10 percent of the seats.
It’s time for shareholders to take the reins and vote out the old boys’ club. If you think only men are up to the job of running companies, think again. Credible research has shown that firms with the highest proportion of women on their boards significantly outperform the lowest in terms of sales, equity, and return on capital. And were women in the majority when the shysters in the financial sector led our economy off the cliff? Hardly.
Naysayers and apologists for the status quo will ask, “Well, if you don’t like the way a company is being run, why not just sell the stock and move on?” Certainly that’s an option, but if you don’t let the company know why you sold your shares, it changes nothing. It’s far better to advocate from the inside, as a stakeholder as well as a stockholder. You have a stronger claim on company policy if you’re even a small part of the ownership.
But the biggest shareholders have the most clout. These are mutual funds holding 401(k) money, huge retirement plan administrators like TIAA-CREF serving educators, and public pots of money such as state reserves and permanent funds. Darn near all of them are investing money that largely comes from women’s work. Women are now not only the majority of the U.S. population, but also half the U.S. workforce — and therefore half the taxpayers. We dominate fields like teaching and nursing and will soon comprise a majority of union members. The money female workers pour into these retirement funds is huge, and the folks that control the votes ought to pay attention to who is represented on the investment end. All these entities should have policies against supporting all-male boards.
It’s time for a new strategy, and I’m happy to report that one company has recently stepped up to the challenge. Joe Keefe, president and CEO of Pax World Funds, has advised companies in which the fund holds stock that Pax will vote against any all-male slate of directors. He has also written a letter to large institutional shareholders calling on them to do the same. It’s part of the firm’s push for gender equality as an investment concept, which includes the only mutual fund in America whose focus is on investing in companies that are global leaders in advancing gender equality.
Just a few large investors following this lead could make all the difference — for the bottom line, for fairness, and for the rights of the majority — women. Only then will we stop trusting in that elusive “pipeline.”