women in the global corporate elite: evidence from the 2006 global fortune 500 clifford l. staples...

Women in the Global Corporate Elite:

Evidence from the 2006Global Fortune 500

Clifford L. StaplesHeather Jackson

Department of SociologyUniversity of North

Dakota, USA

Purpose of Research

• Study the rise of the Transnational Capitalist Class or Global Corporate Elite

• Explore the role of women in the Global Corporate Elite

• Specifically, explain variation in the presence, or absence, of women on FG500 boards

Previous Research

• Most work has been descriptive and/or normative

• No studies specifically of the FG500

• Need to understand and explain diversity in the global power elite and its consequences

Data

• Fortune Global 500 (498) for 2006

• Director names from company web-sites collected in late 2006-early 2007

• Sex coded from name, photos, press coverage, web-searches, etc.

Descriptive Findings

• 6,633 directors, 5,743 individuals• Consistent with previous research on top

corporate boards, we find only a small minority are female. Of the 5,743 individual directors 584, or 10.2% are women

• There are, however, differences by the country in which the corporation is headquartered

Country Men Women Number of

companies

Norway 60.87% 39.13% 2

Sweden 75.61% 24.39% 6

Australia 77.89% 22.11% 8

Denmark 79.31% 20.69% 2

United States 83.31% 16.69% 171

Finland 85.00% 15.00% 2

Canada 85.43% 14.57% 14

United Kingdom 88.03% 11.97% 39

Netherlands 90.12% 9.88% 14

France 90.27% 9.73% 35

Brazil 90.32%. 9.68% 1

Germany 90.44% 9.56% 12

Switzerland 90.45% 9.55% 38

Ireland 90.91% 9.09% 4

Hong Kong 92.86% 7.14% 1

Thailand 92.86% 7.14% 1

Turkey 93.75% 6.25% 5

Belgium 94.05% 5.95% 5

Russia 94.55% 5.45% 1

China 94.57% 5.43% 5

Spain 97.28% 2.72% 21

South Korea 97.46% 2.54% 9

Mexico 97.67% 2.33% 12

Italy 97.97% 2.03% 10

India 98.61% 1.39% 6

Japan 98.96% 1.04% 69

Malaysia 100.00% 0.00% 1

Venezuela 100.00% 0.00% 1

Saudi Arabia 100.00% 0.00% 1

Austria 100.00% 0.00% 1

Taiwan 100.00% 0.00% 1


Number of Women on Board Frequency Percent 0 155 31.1

1 138 27.7 2 122 24.5 3 47 9.4 4 26 5.2 5 4 .8 6 4 .8 8 1 .2 9 1 .2

Total 498 100.0


• On average, there are 1.38 women per board as compared to 11.94 men per board

• Proportionally, women represent from 0% to 50%, with an average of 10.55% per board.

Royal Ahold Netherlands 50.00Statoil Norway 46.15La Poste France 42.85Albertson's United States 42.85Nordea Bank Sweden 36.36Sysco United States 36.36Sara Lee United States 36.36AT&T United States 35.29CFE Mexico 33.33Aetna United States 33.33J.C. Penney United States 33.33Merrill Lynch United States 33.33Xerox United States 33.33McKesson United States 33.33Office Depot United States 33.33Wellpoint United States 31.25Electrolux Sweden 30.76Johnson & Johnson United States 30.76Washington Mutual United States 30.76TIAA-CREF United States 30.76Norsk Hydro Norway 30.00U.S. Postal Service United States 30.00Cigna United States 30.003M United States 30.00Accenture United States 30.00UnitedHealth Group United States 30.00Coles Myer Australia 30.00


• The correlation between number of women on the board and proportion of women on the board is quite high (.908), suggesting that the boards that do include women are replacing men rather than simply adding women and increasing board size

• Consistent with this interpretation, the correlation between board size and proportion of women is relatively low (.190)

Accounting for Women on FG500 Boards

• While in the aggregate the proportion of women in the Global Corporate Elite is quite low (10-15%), there is considerable variation in the proportion of women on FG500 boards

• How can we explain this variation? • How might the Global Corporate Elite

become less male-dominated?


• Proponents of increasing the number of women on corporate boards stress the importance of “networking,” but there is little empirical research on how, or if, social networks might play a role.

• While we do not have data on personal networks, because of director interlocks we do have network data for the corporations and directors of the FG500 (ex. Anne Mulcahy)


• Corporate boards are interested in minimizing uncertainty and discomfort and maximizing comfort and predictability (Kantor)

• Women in the heretofore all-male world of the corporate elite are seen as a threatening and potentially disruptive to this world

• Given that women on corporate boards are few and far between many boards and most male directors have little or no experience with female colleagues on boards


• Thus, knowledge of what it is like to serve on a diverse board is a bit of social capital that is unevenly distributed across this community

• Given that possession of this knowledge will tend to reduce uncertainty, we would suggest that the inclusion of women on corporate boards within the community will generally follow the diffusion of such knowledge


• And given that the diffusion of such knowledge is likely to be transmitted via both formal and informal connections, we would predict that, other things equal, the most connected firms– the firms with the most ties to other firms—will be more likely to have any women directors as well as a greater proportion of female directors.


• First we treat both independent and dependent variables as dichotomous (interlocks/no interlocks by women/no women)

Board Composition

no women on board

one or more woman on

board Total

Director Interlocks

none Count 82 44 126

% within Director

Interlocks 65.1% 34.9% 100.0%

one or more

Count 73 299 372

% within Director

Interlocks 19.6% 80.4% 100.0%

Total Count 155 343 498

% within Director

Interlocks 31.1% 68.9% 100.0%

Chi-Square 90.71, 1df, sig. .000


• Shifting to measuring the dependent variable as the proportion of women on the board, and controlling for the size of the company– a variable thought to be important by some– the results are substantively the same, with a substantively and statistically significant effect (.313) for having any connections.

• Though smaller (.216), the effect when using the number of links as the independent variable holds up.

Regression Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t Sig. B Std. Error Beta 1 (Constant) 5.774 1.190 4.850 .000

Fortune Global 500 Rank 2006

-.002 .003 -.031 -.726 .468

Director Interlocks

7.120 .980 .313 7.266 .000

Dependent Variable: Percent of Board Female R-square .102


• The extent to which firms with women are connected, and to each other in particular, can be seen from two contrasting network diagrams

• The first diagram shows the connections, or lack of connections, between firms that no women on the board. Of the 155 firms without women, only 57 have a tie to another firm, the majority (63.2%) are “isolates.” And as is evident, the network is very fragmented.

Companies with no women on Board


• The second diagram shows the network produced by corporations who have women on board. Of the 343 firms with women, all but 49 are connected to another firm, and, in fact, 291, or 84.8%, are connected in one network. Thus, it is not only the case that connected firms are more likely to have a woman on the board; most of the firms with women on board are connected to each other.

Companies with women on Board

Interlocks and Networks

• An interlock occurs when an individual corporate director serves on the boards of two or more companies

• Such an interlock connects the companies and individuals involved into a network.

• Anne Mulcahy, for example, as of 2006 served on the boards of Target, Xerox, and Citigroup

Interlocks and Networks

• Probably the most connected corporate director in the world is a Frenchman by the name of Louis Schweitzer. He serves on the boards of 8 different corporations from 4 different countries.

Two Kinds of Networks

• From corporation by director networks you can create corporation-corporation networks and director-director networks

• Both kinds of networks are of interest to researchers

FG500 corporate network 2006

FG500 directors 2006

Women in the FG500

• Also consistent with previous studies, we find that women constitute a very small proportion of CEOs

• There are just 8 women CEOs out of 505 (some companies have dual CEOs).

Women CEOs of FG500 2006Name Nationality

Hayashi, Fumiko Japan

Daiei

Lund, Helge Norway

Statoil

Sammons, Mary F. U.S.

Rite Aid

Woertz, Patricia A. U.S.

Archer Daniels Midland

Barnes, Brenda C. U.S.

Staples

Sara Lee

Idrac, Anne-Marie France

Dexia Group

SNCF

Mulcahy, Anne M. U.S.

Citigroup

Target

Xerox

Lauvergeon, Anne France

Suez

Total

Vodafone

AREVA

Women in the FG500

• On the other hand, women are just as likely to serve on multiple boards as are men (men 1.15 boards on average; women 1.18 boards on average)

• Just as likely to serve on a foreign board (men 11.4%, women 10.8%)

• And just as likely to link two boards from different countries (men 3.0%, women 3.3%)

Women in the FG500• The emergence of a transnational corporate

network, or community, that transcends both company and country is a notable feature of globalization

• We are not aware of any studies, however, that explore the position of women within the transnational corporate director network

• A critical question is whether the women who have made it into the network have access to each other and to positions of power within it.

A Man’s World

• As the two previous graphs show, the women are largely superfluous to the network– most men are connected to other men in the network whether or not the women are present.

• In contrast, only some women are connected to each other without “going through” men. Their network is much more fragmented, and many women are cut off completely from the other women in the network.

• In short, in the world of the global corporate elite, women need men far more than men need women.

A Man’s World• This is also evident in the “brokerage” scores for the men and the women• Brokerage (number of pairs not directly connected). The idea of brokerage is that ego is the "go-between" for

pairs of other actors. In an ego network, ego is connected to every other actor (by definition). If these others are not connected directly to one another, ego may be a "broker" if ego falls on a the paths between the others. One item of interest is simply how much

• potential for brokerage there is for each actor (how many times pairs of neighbors in ego's network are not directly connected). In

• our example, actor number 5, who is connected to almost everyone, is in a position to broker many connections.

Brokerage scores

Sex of Individual Mean N Std. Deviation

male 349.08 584 618.118

Female 230.21 81 201.204

• In contrast, only some women are connected to each other without “going through” men. Their network is much more fragmented, and many women are cut off completely from the other women in the network.

Power in Networks• Power is based on the possession or control

of resources• In networks, information is a resource, and

so whoever has access to information has power relative to other actors in the network

• In networks, not all actors have equal access to other actors, creating inequality in resources and thus inequalities in power.

• Independent of the number of women in the network, are they positioned in a way that gives them less power than men?

Sisterhood• Since women are• In networks, information is a resource, and

so whoever has access to information has power relative to other actors in the network

• In networks, not all actors have equal access to other actors, creating inequality in resources and thus inequalities in power.

• Independent of the number of women in the network, are they positioned in a way that gives them less power than men?

Brokerage in Networks• B is acting as a “coordinator” between

actor’s A and C, because all three actors belong to the same group.

Brokerage in Networks• B is acting as a “consultant” between

actor’s A and C, because B does not belong to the same group as A and C.

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