Report says public firms’ leadership is ‘skewed’
Inforum’s 2017 Michigan Women’s Leadership Report shows gender diversity on boards rising slowly, share of female executive officers is stagnant.
Although the share of board seats held by women at the top public companies in Michigan has gone up in the past decade, the ratio of men to women is 85 to 15 — and women’s share of executive officer roles barely has budged since 2007.
The 2017 Michigan Women’s Leadership Report, a biennial study by Inforum Michigan, analyzes the gender makeup of the boards of directors and executive officers at Michigan’s top 100 publicly traded companies in 2017 and compares it to the past decade. The report examines Tier I, Tier II and Tier III companies and looks at highest-paid officers and women of color in leadership.
Tier I includes the state’s 15 Fortune 500 companies; Tier II consists of 11 Fortune 501-1000 companies, followed by 30 companies capitalized at a minimum of $100 million; and Tier III includes 44 companies with market capitalizations below $100 million.
According to the report, “across all 100 companies, just 15 percent of board members are women, and 13 percent are executive officers — ratios that remain stubbornly low. And only 9 percent of the highest-paid officers in Michigan’s largest companies are women.”
The report describes 87 percent of Michigan’s largest corporate boards as “gender uniform or gender skewed” and applies the same term to 88 percent of C-suites.
There are only four women of color executive officers and nine board directors at the top 100 companies this year, the same as in 2007. Those numbers account for less than 1 percent of all executive positions and 1 percent of board seats.
Study authors Sheri Perelli, Toni Somers, Terry Barclay and Cindy Goodaker noted that if change continues at its current rate, it would take 34 years for women to achieve gender balance in boardrooms and 150 years to reach gender equality as executive officers.
Barclay, president and CEO of Inforum Michigan, said there has been some progress in larger companies.
The share of women’s board seats at Michigan’s Tier I companies has increased 79 percent from 2007 to 2017; women now hold 25 percent of all Tier I director positions. This compares to 15 percent at Tier II companies and 8 percent at Tier III companies.
“We wish the pace of change were faster, but particularly at the board level, when you look at a 79 percent increase in the last decade of women (on boards) in the 15 Fortune 500 companies headquartered in the state, an almost 80 percent increase since 2007 is progress. We need to celebrate that,” Barclay said.
Herman Miller and Steelcase are among the five Michigan companies with the most women directors. The average board size of all the top 100 companies is 11 directors, and the two furniture makers each had four women directors in 2017.
The others with the most were General Motors (five), Kellogg Company (five) and CMS Energy (four).
SpartanNash and Wolverine Worldwide each had three women directors in 2017 (27 percent).
Somers — associate dean, professor of management and co-director of the Institute for Leadership and Diversity at Wayne State University — said among the Tier I companies in the sample, whenever there were board vacancies, “the 15 in our sample ceded 40 percent of those vacant seats to the women.”
“When there are vacant seats, the new women — looking at their education, international experience, entrepreneurial experience and expertise — seem to edge out men,” she said.
Her colleague, Perelli — also a professor of management and co-director of the Institute for Leadership and Diversity — said the number of “triple check” scores went up this year, and the number of “triple zero” scores went down. Triple check indicates a company that has women directors, executives and top earners; triple zero is a company with none.
“The triple checks have gone up from 17 to 22 (from 2015 to 2017), but equally impressive are the triple zeroes have gone down,” she said. “We had 29 triple zeros in 2015, now we’re down to 20. Eighteen of the 20 (triple zeroes) are all Tier III companies. Now, we have no Tier I companies with triple zeroes. We have two in Tier II and 18 in Tier III.”
In the executive officer category, there are just four women CEOs of Michigan’s top public companies — GM’s Mary Barra, CMS Energy’s Patti Poppe, Community Shores Bank Corp.’s Heather Brolick and CNB Corp. and Cheboygan National Bank’s Susan Eno, who will retire in December.
Forty-seven of Michigan’s top 100 companies have no women at all in the C-suite, which includes roles such as COO and CFO. Thirty-six have just one, 12 have two, four have three and one has four.
The report noted education is not the issue, as “women today earn proportionately more bachelor’s, master’s and doctoral degrees than men and account for almost half of entry-level corporate hires (46 percent).”
The trouble seems to be “men quickly and dramatically outdistance them in the management pipeline, amassing the requisite credentials for upper echelon positions of leadership as directors and executive officers,” according to the report.
Barclay said that while the report doesn’t get into the reasons for the gap, she believes the problem could be addressed with a three-pronged strategy: “leadership development opportunities for women at key points along the way, mentorship and sponsorship from male executives, and management processes that can address unconscious biases that may arise.”
She said she believes leadership coming from the top would allow women to build the “high-profile projects” that would give them advancement opportunities.
“It takes C-suite leaders and leaders at all levels throughout the companies having a sustained focus on this issue,” she said. “Not because it’s trendy, but because it leads to more solid decision-making for companies.”
She added that focusing on female leadership development also would help address the talent gap.
“The No. 1 issue I hear about is the talent shortage, particularly in STEM fields,” Barclay said. “When you peel the onion back and look at the data, the STEM talent gap is a gender gap. If we can find a way to move the needle even a little bit, we will yield results for our Michigan companies.”
The full report will be released on Tuesday, Nov. 7, at an Inforum luncheon in Detroit.
INFORUM REPORT STATISTICS
- Fewer women hold executive officer positions today than in 2007 (76 versus 88), although the share of women executives edged up 1 percentage point since 2007.
- Only 9 percent of the highest-paid executives at Michigan’s 100 largest companies (36 of 385) are women, two percentage points higher than in 2007. Sixty-nine companies today have no women among their top-compensated officers, the same as in 2007.
- No company has more than two women among the five top-compensated officers. Those with two: CMS Energy Corp.; CNB Corp.; Community Shores Bank Corp.; Saga Communications Inc.; and Steelcase Inc.