title: 2020 women on boards: the national conversation

Register your support on our website:

www.2020wob.com

2020 Women on Boards will help raise

the percentage of women who serve on

corporate boards in the United States to

20% or greater by the year 2020.

The National Conversation

November 20, 2014

Together we can make it happen!

WHAT DOES YOUR BOARD LOOK LIKE?

2

Together we can make it happen!Together we can make it happen!

GENDER DIVERSITY ~ WHY IS IT IMPORTANT?

“While most CEOs recognize the importance of appointing directors of different ages

and with different kinds of educational backgrounds and functional expertise, they

tend to underestimate the benefits of gender diversity.” (HBR Blog Network Why

Boards Need More Women by Yilmaz Arguden | 11:10 AM June 7, 2012)

There are several benefits to appointing more women on boards. When Fortune-500

companies were ranked by the number of women directors on their boards, those

in the highest quartile in 2009 reported a 42% greater return on sales and a 53%

higher return on equity than the rest, according to a recent study conducted by

Lois Joy, Nancy Carter, Harvey M. Wagner, and Sriram Narayanan.

Experts believe that companies with women directors deal more effectively with risk.

Not only do they better address the concerns of customers, employees,

shareholders, and the local community, but also, they tend to focus on long-term

priorities. Women directors are likely to be more in tune with women’s needs than

men, which helps develop successful products and services.

After all, women drive 70% of purchase decisions by

consumers in the European Union and 80% of them in

the United States

3


A FINANCIAL ISSUE AND A SOCIAL ISSUE

Research by Catalyst — a not-for-profit that seeks to expand

opportunities for women — shows a strong link between the

presence of women on boards and corporate reputations. Female

directors serve as role models, and therefore, improve female

employees’ performance and boost companies’ images.

Several rating agencies and investment funds, such as CalPERS and

PAX World, use the extent of gender diversity as one of their

investment criteria.

Studies show that the presence of at least three women is necessary

to change boardroom dynamics. In fact, an analysis of FTSE-

listed boards found that operational performance and share

prices were both higher in the case of companies where women

made up over 20% of board members than those with lower

female representation. (HBR Blog Network Why Boards Need

More Women by Yilmaz Arguden |11:10 AM June 7, 2012)

4


Financial costs are reduced

» (That’s the finding from a new paper (Levi, Li, and Zhang, 2013) by Maurice Levi and Kai Li of the Sauder School of Business at the University of

British Columbia and Feng Zhang at the David Eccles School of Business at the University of Utah.)

Companies that have

more women on their

boards of directors

make fewer bids for

mergers and

acquisitions

And pay less for

acquired companies.


Why are women better in M&A negotiations?

» Past research has shown that men and women behave differently when faced with uncertainty in terms of how overconfident they are.

» Everyone is overconfident — we always think we are better than our true selves — and when men and women are dealing with knowns they tend to be fairly similar in that regard as well.

» But when they are looking at unknowns, or when feedback is delayed or uncertain instead of specific and immediate, women demonstrate less overconfidence than men.

» So the M&A setting is an ideal setting in terms of how it amplifies gender differences in responding to uncertainty with overconfidence.

» (HBR Blog: Boards with More Women Pay Less for Acquisitions

» by Sarah Green | 8:00 AM December 20, 2013)


Where are women on boards?

» Cranfield School of Management shows that the percentage of women

in FTSE 100 companies has risen slowly from 6.9% to 12.5% over the

last decade. The percentage of women directors seems to be

correlated with geography.

» Scandinavian nations having over 20+% women among board

members;

» U.K., Ireland, and Netherlands being in the low teens (10% to 12.5%)

» Germany, France, Luxembourg, and Belgium in the high single digits

(7.5% to 9.7%)

» Mediterranean countries such as Spain, Italy, and Greece reporting low

single digit (2% to 6.5%) representation

» United States 16%


2020 Women on Boards 2013 Honor Roll

Companies

» The 2020 Women on Boards Honor Roll

Companies for 2013

» 256 companies have been on the Winning "W"

Company list for three consecutive years, 2011,

2012 and 2013.

» 2020 Women on Boards 2013-honor-roll-companies

http://www.2020wob.com/companies/2013-honor-roll-companies


Breakdown of women directors by year (2020wob.com)


Even more Financial success..

» A Credit Suisse report found that, overall, companies with a market cap

greater than US$ 10 billion that have at least one woman on the board of

directors outperformed those that had no women at all by

» +26% for large caps over the six years leading up to 2011.

» "Importantly, this mix of companies would also have outperformed global

equities as measured by MSCI’s ACWI," write Credit Suisse analysts Julia

Dawson, Richard Kersley and Stefano Natella.

» In other words, this is a global phenomenon.

» From 2012 to June 2014, companies with at least one woman on the board

have seen a 5% outperformance on a sector neutral basis.

» That amounts to a compound excess return since 2005 of 3.3%.

» Read more: http://www.businessinsider.com/stocks-with-female-directors-

outperform-2014-9#ixzz3Fb9LcxMC


The following charts show performance

effects with women on boards

1. Greater performance globally

2. Greater performance in APAC

3. Greater performance in US

»(Business Insider: MARKETS More: Women And Leadership Credit Suisse, “Companies With Women On The Board Crush Companies That Are Only Men”»ELENA HOLODNY SEP. 24, 2014, 5:25 PM

»Read more: http://www.businessinsider.com/stocks-with-female-directors-outperform-2014-9#ixzz3FbHOe4QF)

Together we can make it happen!


Why aren’t MORE women on boards?

» Three key themes :

• “Women had to be more qualified than men to be considered for directorships. Women also seemed to pay a higher personal price to become board members than men did.

• Although boards say they like diversity, they don’t know how to take advantage of it. We found a stark disconnect between female directors’ experiences and their male colleagues’ perceptions. Women told us they were not treated as full members of the group, though the male directors were largely oblivious to their female colleagues’ experience in this regard.

• Great talent alone is not enough to create a well-functioning board. Boards need formal processes and cultures that leverage each individual member’s contribution as well as the directors’ collective intellect.”

» (HBR: Dysfunction in the Boardroom by Boris Groysberg and Deborah Bell http://hbr.org/2013/06/dysfunction-in-the-boardroom/ar/1)


Portrait of the Female Director (HBR Dysfunction in the Boardroom June 2013 by Boris Groysberg and Deborah Bell)

» The female directors tended to be younger than the male directors—probably because, on

average, the women had joined boards relatively recently, whereas the men had served on

boards longer. Seventy-six percent of the female directors (versus 69% of the male directors)

were employed in an operational role; 68% (versus 51% of the male directors) were in a lead

role, like CEO, president, or partner.

» These findings suggest that to receive invitations to boards, women might need to be more

accomplished than men. They also contradict the popular belief that female board members

have mostly nonoperational or support-function experience.

» Another distinction we discovered between the backgrounds of female and male directors was

that by and large, the women on boards worked for private corporations, not public ones. A

majority of the male board members worked for private corporations as well, but a higher

percentage of the men worked for public companies—likely a reflection of the fact that fewer

women occupy the C-suites of public companies.

» The data also indicate that female board members may have made different trade-offs on their

way to the top. In comparison with male directors, fewer female directors were married and had

children. A larger percentage of the women were divorced—suggesting they may have incurred

greater personal costs.


Summary

1. Having women on boards is a distinct and significant financial advantage.

Women help organizations perform better by adding diversity of thought,

background and experience.

2. Women prevent “over-confidence” in negotiations which can make with

better deals for the organization

3. There need to be 3 women on boards for the full effectiveness to be

demonstrated in results, but even one can make a difference.

4. Women need help to get there, demanding greater ability and overlooking

competent women is a mistake.


What can I do?

• NATIONAL: Join 2020 Women on Boards at (click on grey links below)

Women on Boards 2020

• CHICAGO: Learn more about the issues on November 20, 2014 WOB National Conversation November 20, 2014

Chicago, IL Sub-Zero/Wolf Showroom:

REGISTER HERE

Special Guest: Adela Cepeda, Founder and President of A.C.

Advisory Inc.; Board of Directors: BMO Financial Corp.

Hosted by: 2020 Women on Boards/Chicago Chapter

• LOCAL: Locate women for your board membership

how-find-qualified-women-serve-corporate-boards

• LOCAL: Start a new chapter for your city Start a chapter

http://www.2020wob.com/

http://www.2020wob.com/take-action/national-conversation-board-diversity

https://2020wobchicago2014.eventbrite.com/

http://www.2020wob.com/chapters/chi

http://www.2020wob.com/learn/how-find-qualified-women-serve-corporate-boards

http://www.2020wob.com/take-action/form-2020-team

www.2020wob.com

» Dr. Terri Friel

http://tfriel.wix.com/doctus-consulting