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The Boardroom Gap: WBJ's Findings

Boardroom Gap: Women vastly underrepresented in Central Mass. corporate leadership

February 5, 2018
ILLUSTRATION/jasonschneider.com
ILLUSTRATION/jasonschneider.com

For more than two decades, each time Robert Shillman has sat down at a board of directors meeting as the founder and executive of the Natick laser manufacturer Cognex, he's looked across the table and seen nothing but men.

In a male-dominated industry, Cognex hasn't employed a female director or top executive since at least 1995.

It isn't alone among Central Massachusetts public companies.

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Southborough electric parts supplier Sevcon and Athol tool maker L.S. Starrett haven't had a woman in such a role during the same two-decade-plus period, and Westborough information-technology firm Virtusa hasn't had a female director or senior executive since at least 2008. In the past 22 years, Acton drug-test maker Psychemedics has had only one woman hold a senior executive role, and she was in that position for just one year – a decade ago.

"That's pathetic," Judith Nitsch, a Worcester Polytechnic Institute graduate and founder of Nitsch Engineering, said of the Central Massachusetts record for gender equality in business leadership positions.

Over the course of three months, Worcester Business Journal conducted an examination of the gender makeup of the 1,527 top executives and board members at 75 prominent Central Massachusetts business organizations – including public and private companies, hospitals, colleges, social service nonprofits and financial institutions – based on their filings with the U.S. Securities and Exchange Commission and the Internal Revenue Service, as well as their own websites.

WBJ's examination found while the overall number of women in Central Massachusetts business leadership positions may appear to achieve an acceptable threshold for gender diversity – 33 percent – the figure is skewed by a handful of organizations (mostly social service nonprofits) and the gender mix at for-profit firms is particularly low, especially in CEO positions.

"Inertia is a very powerful force. Companies have been doing the same thing for a long time and some companies, frankly, for insecurity, they don't want a diversity of views on their board, and I think that's a sign of weakness," said Tim Van Dyck, an employment attorney with Worcester-based law firm Bowditch & Dewey.

Cognex, Psychmedics, L.S. Starrett and Sevcon did not return calls for this story. Virtusa declined to comment.

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WBJ's findings

Twelve of 17 public companies examined for this report didn't have a single female senior executive. Of 78 public-company executives examined in Central Mass., only six were female.

Put another way, last year more men named John – seven – sat in executive offices at area public companies than women of any name.

None of those 17 public companies are led by a woman; and – with the Jan. 26 resignation of CEO Shira Goodman from Framingham office retailer Staples – neither were any of 13 private companies examined for this report.

Of all the 75 organizations WBJ looked at, nine were led by a woman, a rate of 12 percent.

By and large, an organization's top executive (typically with the title CEO, although titles like president and executive director are also used) is chosen by its board of directors/trustees, and those CEOs are responsible for filling out the rest of the executive suite. The board members still oversee those executives, including determining their pay and reviewing organizational audits; and those executives can be board members themselves.

At public companies, board members are nominated by a committee typically including existing board members and a CEO or other top executive, and the nominees are approved by shareholders. At public colleges, board members are usually chosen by state officials, while private colleges and social service nonprofits typically have selection committees fill out their volunteer boards.

"Companies that are worth their salt know they need new blood, male or female," Van Dyck said. "You get people who are seeing things that people who've been around a long time aren't seeing."

For the 17 public companies WBJ examined, only 16 percent of their board members were women.

Public company boards generally have minimal turnover, leaving few opportunities to create more gender diversity. Nearly one out of four Central Mass. public-company directors are men who are at least 70 years old.

Oxford medical device maker IPG Photonics appointed its first female director in at least 11 years in 2016 by adding a 10th seat to its nine-member board. In a statement to WBJ, IPG said it is an equal-opportunity employer.

Overall, 33 percent of area executives and board members are women, the WBJ analysis found. However, that rate is heavily skewed by nonprofits like the YWCA of Central Massachusetts, whose 30-member volunteer board is entirely women and whose executive office counts one man and nine women.

For the total percentage of board members and senior executives, Central Massachusetts social service nonprofits had the best gender mix (50 percent women), followed by colleges (39 percent), healthcare organizations (31), financial institutions (27), private corporations (18) and public companies (13).

What's a good percentage?

Women make up 48.6 percent of the Worcester County workforce and 50.6 percent of the county's population, according to the U.S. Census Bureau.

Knowing men have long dominated business leadership positions, The Boston Club, an advocacy group that reports each year on women in business leadership positions throughout Massachusetts, doesn't say organizations today need to hit a 50/50 threshold in their boards and executive offices to be considered leaders in gender diversity. The group puts that figure at 30 percent.

In WBJ's examination, 39 of the 75 organizations achieved this 30-percent threshold (10 had a 50-percent or higher gender mix), but no public companies.

The Boston Club has found slow progress over the years in its annual census of the state's 100 largest public companies.

Women accounted for an all-time high of 19 percent of directors, the Boston Club found in its 2017 report. The number of companies it calls zero-zeros — those with no women on their board or in their executive offices — is down two-thirds from a decade ago.

But progress toward gender equality was minimal, the report concluded. Companies with board vacancies often filled them with male directors, and those zero-zero companies still comprise one-tenth of the list. Of the 100 companies in the report, 47 did not have a single female executive officer.

Among Central Mass. public companies, six are zero-zero firms, according to WBJ's analysis.

Patricia Flynn, a business professor at Bentley University who studies women in business, doubted that companies committed to hiring women would struggle to find at least one female leader.

"If you've been trying to do this for several years and you're still zero-zero, you need help," Flynn said.

Central Massachusetts has 141 women serving on boards in the region's colleges, social service nonprofits and healthcare organizations, so the talent would seemingly be available for public companies.

Yet, Craig Huntley, the chief development officer of Hopkinton solar energy company Solect Energy — a private company with no women in its nine top leadership positions — said his firm struggles to hire women to key positions because his industry is overwhelmingly male.

"Gender diversity is a challenge in an industry that's comprised of construction workers and electricians and engineers," Huntley said. "We deal with that challenge every day."

The benefits of female leadership

Gender equality isn't just a noble goal for businesses. It can improve the bottom line.

Companies with female CEOs were found to have a 19-percent better return on equity than those with male CEOs, according to a 2016 report from Swiss multinational financial institution Credit Suisse. When companies had women in at least 15 percent of their senior management positions, the premium was 18 percent.

Share price was found to have risen in direct correlation with each step a company takes toward greater gender diversity, especially those in which women make up at least half of senior management roles, said Credit Suisse.

A 2017 report from New York City research firm McKinsey & Co. found a significant correlation between diversity and performance. Companies in the top quartile for gender diversity on corporate teams are 21 percent more likely to outperform on profitability and 27 percent more likely to have better value creation.

The revelation over the lack of gender diversity on area boards and executive suites comes amid the national #MeToo movement of women who've disclosed workplace sexual harassment, in some cases dating back decades.

Susan Adams, a Bentley University professor who's conducted research for The Boston Club, said having female executives helps with the first step of addressing sexual harassment: awareness.

"Women will listen to [harassment concerns] a little bit more than men because they understand what's going on," Adams said.

Central Mass. vs. state & nation

Central Massachusetts's performance on business leadership gender diversity isn't particularly surprising or an outlier, said Jean Beaupre, the faculty advisor of Nichols College's Institute for Women's Leadership.

"When you look at the corporate side, it's fairly in keeping with the national numbers, but in some places it was certainly lower," said Beaupre.

A report by Nichols College's Institute for Women's Leadership reported in March women made up 12 percent of executive officers at 100 public companies in Massachusetts, slightly behind a 14.2-percent national average.

In Central Massachusetts, it's 7.7 percent.

This region's record among nonprofits – including colleges, hospitals and social service organizations – is better.

Among nonprofits, 27 percent of Central Massachusetts chief executives are women, which beats the state and national averages, according to the Nichols report. The rate of women serving on nonprofit boards in this area, 38 percent, falls in between the state and national averages.

Central Massachusetts colleges – with 39 percent female leadership – do better than the national average, Beaupre said, but added, "at the end of the day, neither one is great."

"Neither one gets to where we'd like to be for parity," she said.

Making progress

At the Boys the Girls Club of Worcester, executive director Liz Hamilton is the first female head in 128 years. Nancy Crimmin is the first female president in nearly a century at Worcester's Becker College, and Laurie Leshin is Worcester Polytechnic Institute's first female president.

Framingham retailer TJX Cos. was led by Carol Meyrowitz while she was CEO until 2015, and she remains the company's executive chairwoman. Laura Sen was the CEO of BJ's Wholesale Club of Westborough from 2009 to 2016. Until Jan. 26, Staples was led by a female CEO – Goodman – although she has been replaced by a man, former Coca-Cola executive Alexander Douglas.

Marlborough drugmaker Sunovion Pharmaceuticals – a zero-zero company – said it has 10 women in leadership positions, including vice presidents in key areas, and initiatives in place to advance women in leadership roles including a mentorship program.

"Sunovion recognizes the need in advancing women into leadership positions within the life sciences industry, including within our own company," Sunovion said in a written statement.

Read the entire The Boardroom Gap series

Read the entire Boardroom Gap series

Feb. 5 edition

– WBJ's Findings: Women vastly underrepresented in Central Mass. corporate leadership

The Pay Gap: Central Mass. male executives make $1.3M vs. $573K for women

Editorial Opinion: The importance of diversity

– Letter from the Editor: Can't keep doing the same thing and expect different results

Feb. 19 edition

- Feeling marginalized: Central Mass. businesswomen who've sat in positions of power say they don't get the same automatic credibility as men

Gender diversity = Profits: Companies with a greater mix of women in leadership perform better

March 5 edition

Narrowing the boardroom gap: Financial, legislative and cultural pressures are creating more gender diverse business leadership

The best candidate gets the job: Diverse candidate pools lead to diverse companies, leading local firms say

Letter from the editor: Now comes the hard part

Viewpoint: Women of color need to break the concrete ceiling