The Glass Ceiling Goes Under the Microscope

A myth just got busted. You know, the one about how far women have come in Corporate America. The reality is that diversity in the executive suite and the boardroom isn't all it's cracked up to be.

InterOrganization Network (ION), a coalition of regional groups that work toward furthering women's roles in the business world, released a study showing that many public companies still operate with homogeneous groups of senior managers and boards (not a huge surprise) and that few include enough women and minorities to capitalize on the benefits of diversity--which include notable performance advantages (a surprise to many). Catalyst, a corporate membership research and advisory organization, reports that companies with higher representation of women board directors benefit in three financial measures: Return on Equity: On average, companies with the highest percentage of women board directors outperformed those with the least by 53%; they enjoy at least 42% greater return on sales; and rack up at least 66% better return on invested capital.

ION's study reveals that seventy-two percent of 1161 companies in nine of the ten U.S. regions tracked had no women among their top-compensated executive positions The number of companies without women in the highest compensated executive officer ranks exceeded the number of companies with no women executive officers, suggesting that even at the highest levels of corporate leadership, the best paid jobs are still held by men. And little progress has been made in electing women to the boards of the largest public companies. Even more disturbing, the survey shows that women have been losing ground; some of the largest companies in some regions that have traditionally had the highest percentage of women directors have fewer now.

But as diversity issues move front and center among shareholder activists, progress will be made in the advancement of women to executive suites and boardrooms. Advocacy groups are calling on shareholders to use their proxies to build board diversity -- and as shareholders raise their voices, management will have to rise to the governance challenge.

Besides, even the stodgiest board knows that as companies combat the current market meltdown and increased competition from overseas, they can't afford to ignore women's skills and experience. Or, at least, they'll know that to do so is at their peril.