every other one - more women on corporate boards

8/10/2019 Every Other One - More Women on Corporate Boards

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An Update of a Policy Statementby the Committee for Economic DevelopmentsPolicy & Impact Committee

November 2014

Every Other One:More Women onCorporate Boards


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Every Other One:More Women on Corporate Boards

Table of Contents

Womens Economic Contribution Subcommittee Members 4

Summary 5

Introduction 7

e Business Case for More Women on Boards 7

e Supply/Demand Dynamics for Women Directors 10

International Progress 12

CEDs Path Forward 13

Endnotes 14

CED Trustees 15


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Womens Economic Contribution Subcommittee Members

Co-Chairs

Beth A. Brooke-MarciniakGlobal Vice Chair, Public PolicyEY

Debra PerryNon-Executive DirectorKorn Ferry International, Inc.

Members

Lydia I. BeebeCorporate SecretaryChevron Corporation

Nomi M. BergmanPresidentBright House Networks

Shideh Sedgh BinaPartner

Insigniam

Cynthia ClevelandCEO and FounderBroadthink/BroadLit

Robert H. Colson, Ph.D.Distinguished Lecturer ofAccountancyBaruch-CUNY

Julie Hembrock Daum

Partner and Head of the NorthAmerican Board PracticeSpencer Stuart

Michelle Finneran DennedyVice President & Chief PrivacyOfficerMcAfee, Inc.

Janice ElligCo-Chief Executive OfficerChadick Ellig

Gerri ElliottExecutive Vice President,Chief Customer OfficerJuniper Networks, Inc.

Melinda C. EllsworthVice President and Treasurer

Kaiser Aluminum Corporation

Barbara FlanaganPresidentCaledonia Partners

Margaret ForanVice President,Chief Governance Officerand SecretaryPrudential Financial

Barbara Hackman FranklinPresident and CEOBarbara Franklin Enterprises;Former SecretaryUS Department of Commerce

Patricia GottesmanAdvisory Board ChairmanNinah/Publicis

Patrick W. GrossChairman

e Lovell Group

Ronald GrzywinskiChairman EmeritusShoreBank Corporation

Kathy Hopinkah HannanNational Managing Partner,Global Lead PartnerKPMG LLP

Andrea JungPresident and CEOGrameen America, Inc.

Linda E. McMahonPrincipalMcMahon Ventures

Deborah Hicks MidanekChairman and CEOSolon Group, Inc.

Susan NessSenior Fellow, Center forTransatlantic RelationsJohns Hopkins School ofAdvanced International Studies

Justus J. OBrienPartnerEgon Zehnder

John F. OlsonPartnerGibson, Dunn & Crutcher LLP

Patricia F. RussoChief Executive Officer (Ret.)Alcatel-Lucent Technologies, Inc.

Larraine SegilChairmane Committee of 200Foundation

Paula SternChairwomane Stern Group, Inc.

Davia B. TeminPresident and Chief ExecutiveOfficerTemin and CompanyIncorporated



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Summary

Overview

Women occupy 16.9 percent of Fortune 500corporate board seats today, according to theCatalyst 2013 Board Census. Progress has beenmade, but the rate of change has been slow. atpercentage has grown just 3.3 percentage points(from 13.6 percent to 16.9 percent) in the lastdecade, despite womens proportionately largerpresence in the labor force and higher educationenrollment. is disparity seems inconsistent with

a boards desire to utilize all sources of expertiseand insight for its deliberations, as one means fora company to compete effectively in the globalmarketplace.e gender imbalance also raisesthe questions of (i) full business utilization offemale human resources; (ii) potential alienationof a firms female employee and supplier base;(iii) lack of attention to women, who make a largepercentage of household purchasing decisions;(iv) missed opportunities to appeal to female retailand institutional investors; and (v) the ability

of business to follow important social trendsregarding gender.

e Committee for Economic Development (CED)is at the forefront of business-oriented public policygroups in advocating that U.S. corporations bringmore women onto their boards. In 2011, CEDformed a Subcommittee on Womens EconomicContribution, composed of 18 prominent men andwomen from the for-profit and nonprofit sectors,to study the issue and make recommendations. In2012, CED issued a policy statement, Fulfilling the

Promise: How More Women on Corporate BoardsWould Make America and American CompaniesMore Competitive. In this current paper, CEDprovides updates on this topic and outlines its planfor direct outreach to the nominating committees ofprominent corporate boards.

CEDs research indicates that potential womenboard members face a chicken and egg problem.Although there is little overt bias, boards tend

to prefer candidates that are either (i) sitting (orretired) CEOs, or (ii) current directors of publiccompanies. Women are a small minority of thosetwo groupings today. In annual proxy statements,nominating committees profess a desire for boarddiversity, but tend to repeat those customarybehaviors, which ipso factodiscourage diversity.If this self-perpetuating cycle of exclusion couldbe broken, female c-suite executives, divisionpresidents, law firm partners, accountingfirm partners, financial service executives,entrepreneurs, foundation heads and universitypresidents would constitute just a partial list of thelikely qualified candidates.

CEDs Position

Voluntary Goal Setting and DisclosureMany corporations seek to increase diversity atthe board level. is goal should be voluntary,rather than mandated by government quotas,which are in effect in several other countries. If

U.S. publicly traded companies set well-defi

nedgoals and provide regular disclosure on progress,they can build a pathway toward fulfilling thisobjective. If prominent corporations adopt atarget of recruiting women in one of every twoboard seat openings due to normal retirementsand existing female seats are retained, CEDbelieves that 30 percent participation would likelyoccur by 2018.

Expanding the Criteria for DirectorsBoard-nominating committees and executive

search firms, which oen work for thecommittees, typically have excessively narrowlists of qualifications for directors, in ourjudgment. erefore, potential female candidatesface artificially high barriers. As a practicalbusiness matter, CED suggests that boardsexpand their criteria for candidates, whichwill open up opportunities for women whileimproving the quality of boards in several ways.


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Source of Women Board MembersWith these expanded criteria, female c-suite

executives, divisional presidents, law firmpartners, accounting firm partners, financialservice executives, entrepreneurs, riskmanagement professionals, foundation heads anduniversity presidents would provide a deep poolof likely qualified candidates.

Direct Contact Supplements Existing ProgramsIssue promotion, numerical monitoring,executive education, public pressure, andshareholder resolutions place gender imbalance

in the corporate mindset. CED believes one-on-one dialogs among peers will accelerateprogress. CED proposes to harness its trustees toarrange small group meetings with nominatingcommittee members of prominent corporateboards.ese conversations will focus on whydiversity is slow and what business leaders can doto achieve progress.ey will also capture bestpractices from those companies that are alreadymaking strides to bring women on boards.

Outreach to Board Nominating Committees

CEDs past outreach included statements by itsPolicy and Impact Committee, which supportedseminars and hosted related panels at CEDs policyconferences. A key goal was to place this issue inthe business communitys mindset and to push forthe 30 percent target by 2018.

Our new outreach will focus on one-on-one contactwith nominating committee members and chairs,most of whom are male. CEDs 200+ trustees, 56 ofwhom are women, are accomplished businesspeople

who can utilize their peer-to-peer networks toexplain the benefits of board diversity, and toencourage a fresh outlook about board candidates.CED will assist its trustees in the administration andimplementation of this outreach, and will supportsupplementary seminars, luncheons, and dinners tohighlight this program.

Contact Information

Michael J. PetroExecutive Vice President

Committee for Economic Development2000 L Street, NW, Suite 700Washington DC 20036

Work: 202-469-7815Cell: 703-786-0828Fax: 202-223-0776E-mail: [email protected]


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Introduction

In recent years, an increasing number of business-oriented groupsand several organizationsfounded to focus on this issue, such as the 30Percent Club,irty Percent Coalition, 2020Women on Boards, Womens Forum of NewYork, Catalyst, Women Corporate Directors, andCorporate Women Directors Internationalhavecalled for an increase in female membership onprominent corporate boards. ese efforts haveattracted blue-chip corporate support and havebrought increased media attention to the matter.

However, success has been muted over the last tenyears. A 2013 Catalyst Board Census showed thatwomen now occupy 16.9 percent of Fortune 500board seats,1 up from 15.2 percent in 2008, and13.6 percent in 2003.

is statement will consider the following aspectsof this issue:

e Business Case for More Women on Boards e Supply/Demand Dynamics for Women

Directors

International Progress CEDS Path Forward: e Every Other One

Initiative

e Business Case for

More Women on BoardsIncreasing the percentage of directors who arewomen makes good business sense because itbenefits corporations in several ways:

Enhances performance and competitiveness Conveys to female managers: no glass ceiling

and opportunity for all Aligns with stakeholders, affinity groups

and customers Aligns with societal norms Anticipates and forestalls potentially

intrusive regulation Responds to institutional stockholders

Other countries recognize these benefits and arepushing for more women on boards.

Enhances Performance and Competitiveness

A case can be made that board diversity correlatespositively with enhanced corporate financial

performance, thus indicating that female boardmembers strengthen a companys competitiveness.Several studies support this reasoning, and furtherinvestigation is being done. However, the historyof representation of women on corporate boardsis relatively short. Researchers have difficultyin isolating the impact of a single director, ora very small group of directors, on corporateperformance.2

e paucity of female representation on corporateboards is inconsistent with the need for broadened

insights for board deliberations, which help acompany compete effectively in the increasinglydiverse global marketplace. e incorporation ofmore women on boards would also combat thegroup-think problem,3whereby a homogeneousall-male board might, at times, fail to evaluatealternative viewpoints that could promote thecompanys well-being. Some scholars haveattributed group-think to governance failureof major corporations like Enron and Lehman


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Brothers. Furthermore, with women making alarge portion of the consumer purchasing decisions

in todays economy, having female directors inboard deliberations appears logical and consistent.e Committee for Economic Development(CED) believes male directors should play a rolein examining this matter and engaging on thediversity issue.

Women now constitute a substantial portion ofhighly talented labor.at proportion is projectedto grow. Female enrollment and degree awardssurpass those of males at the undergraduate and

graduate level, and in the United States, womenrepresent 35 percent of MBA enrollment.4Asthe consultancy McKinsey has pointed out, theinclusion of more women in corporate leadershiproles expands the supply of skilled and motivatedtalent, which leads to potential performance gains.

If the most prominent U.S. corporations fail tosufficiently integrate women into the workforce, U.S.competitiveness will be hurt by not utilizing the fullpotential of the labor pool. As the old sports maximsays, You cant win the game, if you leave half your

players on the bench. U.S. businesses may not beoptimizing their human capital resources.

Conveys to Female Managers: No Glass Ceilingand Opportunity for All

By including more women as directors, corporationssignal to their female employees that opportunitiesare available to them at the highest levels. eglass ceilingi.e., the invisible barriers thatprevent women from reaching top jobs despite theirqualificationsis then weakened. By example and

action, female directors are positive role modelsfor aspiring female managers. Finally, the pull fromthe top can have a powerful effect throughout thevarious levels of a company. Diverse boards lead to adiverse senior management and diverse workforce.A recent study (2013) indicated that companies withmore female directors tend to have more women incorporate offices.5

Aligns with Stakeholders, Affinity Groups andCustomers

With women representing over half of the U.S.labor force, many corporations have femalestakeholders as consumers, suppliers, anddistributors.ey make decisions that ultimatelyaffect a companys profit, share price, and overallimage. Given their shared experiences with thesemanagers, women directors should be more intune than male directors with the decision-makingprocesses of these corporate constituents.

Correspondingly, female stakeholders may have anaffinity for companies that show a willingness toengage women as directors.ese stakeholders mightdirect purchase orders, referrals, and investmentrecommendations toward such companies, thuscontributing to corporate success. CED believescertain businesses recognize this possibility andhighlight women-director initiatives through theirmarketing and public relations functions. Promotingboard diversity for its own sake may thus enhance acorporations reputation and boost returns.

Enterprises specializing in the consumer marketnote that women make approximately two-thirdsof the buying decisions in the typical Americanhousehold.6By including women on boards,consumer-oriented firms can focus on this criticaldemographic at a strategic level.

Aligns with Societal Norms

As one researcher noted, Arguments abound for anincrease in diversity in every profession includinglegal practice, medicine, academic, law enforcement,

firefighting, and more.7Moreover, formerly male-oriented pastimes, such as country clubs, cityclubs, and similar organizations are, in many cases,expanding access to include women. In 2012, forexample, Augusta National Golf Club, site of theprestigious Masters Tournament, admitted its firsttwo female members, aer many years of defendingits exclusionary practices.e prior restrictivemembership policies of these organizations had theeffect of excluding women from informal business


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networking that sometimes took place therein, anddenying them the elevated status that accompanied

such membership. By virtue of its prominence,a Fortune 500 board is perhaps the ultimateassociation in American business, yet, as this paperhas noted, statistically such boards are behind thefemale inclusion trends evident in other sectors ofthe economy and society.

In fact, in 2014, 8 percent of Fortune 500 boardshave no women, 28 percent have one woman, and64 percent have two or more women, according toHeidrick & Struggles. ese figures are consistent

with Catalysts 2013 data.

CED and others believe that female-inclusive boardshelp companies engage better with the societies inwhich they operate, and help restore public trust inthem as socially responsive institutions. In this sense,CED advances a broader view of the corporation, i.e.,that corporations have certain responsibilities beyondmaximizing operating profits and shareholderreturns. is expansive view of corporate roles hasbeen widely accepted by business executives, free-enterprise scholars, and courts.

Anticipates and Forestalls PotentiallyIntrusive Regulation

Prominent businesspeople tend to think that U.S.public companies are overregulated, and thatoverregulation hurts global competitiveness. Takingaction to limit regulation is, therefore, desirable.Voluntary efforts regarding women on boards mayreduce the need for potentially intrusive governmentmandates. Also, quotas lead to directors who areappointed to fulfill one requirement, and that notion

leads to the impression of a two-tier board.

As executive search firm Spencer Stuart pointedout in its 2013 survey, 54 percent of the S&P 500board respondents said they were looking for womendirectors, but the actual percentage of new femaledirectors was far lower.8Although companies expressinterest in expanding board diversity, their interestis not translating into results. Similar slow progresshas prompted national governments in a number

of major economies to authorize quotas for femaledirectors on the boards of publicly held companies.

CED believes that diversity goals should be achievedvoluntarily, rather than through government-mandatedquotas. It is possible that the United States federalgovernment could approve intrusive regulations ifU.S. businesses fail to address perceptions that theylag behind their international counterparts.

Currently, the U.S. Securities and ExchangeCommission (SEC) requires disclosure of whether,and if so how, a nominating committee considersdiversity in identifying nominees for direction.9

is disclosure is far from a legal requirement toappoint female directors, but it compels publiclytraded firms to acknowledge diversity in a formaland highly legalistic manner. e latest empiricalanalysis of Fortune 50 proxy diversity disclosures(2012), however, concluded that over half ofdiversity disclosures fail to fully comply withthese requirements.10

Absent meaningful progress, if U.S. companiescontinue to ignore gender balance in theboardroom, the SEC rule could be a first step

toward mandates. CED views mandates as unlikely,but burdensome regulations could damage U.S.competitiveness, and could force rigid behaviorrather than good-faith exercise of judgment.What was intended to be a floor under femalerepresentation could instead become a newglassor even a steelceiling above it. us, U.S.companies should comply with the spirit of thedisclosure, and the diversity objectives behind it,because this tactic makes business sense.

Responsive to Institutional Stockholders

e boards of publicly traded corporationsare ultimately accountable to the owners, i.e.,stockholders. For the largest publicly ownedcorporations, ownership is diffusedspread amongmany institutions and individual stockholders,with the largest owner representing a tiny fractionof the equity. Nonetheless, if a number of sizeableshareholders combine efforts, they can haveinfluence on issues of corporate governance.


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In 2012 and 2013, for example, a group of publicemployee state pension funds, led by CalPERS (the

California Public Employee Retirement System),worked with the 30 Percent Coalition (and severalprivate money managers) to send letters to 137Russell 1000 companies that lacked female directors(the year before, similar letters were sent to 41 ofthe S&P 500 without women directors). e lettersencouraged board diversity, and the investors triedto engage in dialog with the firms. As a followup, the institutional investors filed shareholderresolutions with over 20 of the companies for avote at their annual meetings (most resolutions

were eventually withdrawn). Subsequently, 14 ofthe 168 companies appointed a woman to theirboards,11which suggests that shareholder pressurehad a positive impact. Corporate America doesntchange overnight, said an institutional investor whoparticipated in the effort.

During the entire 2013 proxy season, shareholderresolutions on board diversity were filed with 26companies, and 22 were withdrawn by mutualagreement.12ree proposals went to a vote, andone won majority support (CF Industries).13For the

2014 proxy season, activity on the board diversityfront was similar to 2013. ere were 26 resolutions,of which 18 were withdrawn.ree proposals wentto a vote with an average shareholder support levelof 31 percent. ree proposals are still pending,and two resolutions were filed at companies thatcancelled their meetings.

e shareholder resolution is a useful tool forproactive institutional stockholders because itprovides leverage with boards, who generally try tolimit annual meeting votes to a handful of items, such

as director re-election and executive compensation.In exchange for the investor withdrawing theresolution, the board might agree to revisit theconcept of appointing a female director.

CED believes that strong voluntary efforts toinclude women would limit the filing of resolutionsand would demonstrate corporate responsivenessto those stockholders that are concerned aboutgender imbalance in the boardroom.

e Supply/Demand Dynamics

for Women DirectorsSupply Dynamics

As noted, board chairmen, CEOs and boardnominating committees express an interest indiversity, but they oen say the small number ofwomen on boards is due to the limited number ofqualified female candidates. Our research suggeststhat the nominating committees (and the executivesearch firms working for the committees) have anexcessively narrow list of director qualifications, so

potential female candidates face an artificially highbarrier. Prerequisite qualifications for directorstypically include:

Sitting CEO of a publicly traded company Retired CEO of a publicly traded company Existing board service on a publicly

traded company Personal acquaintance with a current

board member

Because women are underrepresented in all fourcategories, they face a classic chicken and eggproblem. Boards thus rationalize falling back intocustomary behaviors that favor male nominees.

To remedy this situation, CED believes thatnominating committees should expand theircriteria slightly, to include female:

C-suite executives Divisional presidents Retired senior law firm attorneys

Retired accounting firm partners Investment bankers and money managers Entrepreneurs Risk management, compliance and

governance officers Management consultants Nonprofit, academic and public sector executives


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One institutional investor told CED, Boards haveto take a chance on a first-time woman director.14

CED recognizes that prominent boards oenprefer the tried and true in corporate governancematters, and that risk-taking in this area is frownedupon by CEOs. Indeed, one director told CED,Boards exercise a lot of caution, since the newboard member may serve 10 years or more. eydont want anyone who is disruptive, male orfemale. Nonetheless, CED believes there are asizeable number of seasoned managers in theseten categories. Finding a reasonable grouping ofqualified female candidates should not require

excessive vetting or heavy li

ing by thenominating committee, but these candidates mayfall out of the existing directors networks.

Demand Dynamics

It is unlikely that the demand for new Fortune 500directorseither men or womenwill increasein the short run. Most sitting directors are re-nominated, and many remain on their boardsfor long periods of time. An Ernst & Young (EY)report indicated that 45 percent of board seats are

held by directors with tenure of 10 years or more,15

and that the turnover rate is dropping.

e median turnover rate for board membersof prominent U.S. firms is seven percent peryear, and the average number of board seats is10.8 (about 5,400 seats in the Fortune 500), soa grouping of 100 board members will only seeseven vacancies in a given year.16 However, aboutone percent of the seven percent reflects seniorinsider appointments (like a new CEO), of whichwomen are underrepresented. is leaves just six

percent, or 324 seats per year, available for new andindependent directors (2013 was slightly belowaverage with 298 independent seats17). In otherwords there is less than one new independentdirector for each company per year.

e average annual rate of increase in womendirectors has been approximately 0.4 percent, or

roughly 22 additional seats per year. On this basis,the 16.9 percent in 2013 would climb to 30 percentof Fortune 500 directors in 33 years (by 2046).18e math is as follows: 30 percent minus 16.9percent (or 13.1 percent) divided by 0.4 percent(per year) equals 33 years.

If the average rate of increase doubles from 22seats per year to 44 seats per year, the 30 percentgoal is reached in 2029, or 16 years. Clearly, a morefocused effort is required to accelerate progress.

If the Fortune 500 adopts CEDs Every OtherOne initiative, 30 percent is achieved in fouryears. CEDs calculation assumes (i) all existingfemale board seats are retained; and (ii) the 2014percentage is 17.3 percent (16.9 percent in 2013plus 0.4 percent equals 17.3 percent in 2014), or934 seats. CEDs goal suggests 162 new womenboard seats per year (50 percent x 324 =162),which is added to the presumed 2014 total of 934seats. Reaching the goal of 30 percent (or 1,620seats) thus requires four years. e math is as

follows: 1,620 seats minus 934 existing seats equals686 new seats needed for women to occupy 30percent. 686 new seats divided by 162 new seatsper year equals approximately four years.


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International Progress

Public Company and Board Statistics

Across the globe, there are tens of thousands ofpublicly traded companies, most of which aresmall compared to big U.S. firms.e MSCI ACWIAll Cap Index consists of 9,000 large, medium,and small capitalization corporation segmentsin 46 developed and emerging markets. Forbespublishes an annual ranking of the top 2,000 publiccompanies in the world.e Fortune Global 200 isanother listing of blue-chip international firms.e

Fortune 500 reflects only U.S.-based firms (which,of course, generally have international operations).To compare size, the median equity market value ofthe Fortune 500 is $35 billion as of July 2014. emedian equity value of the CAC 40 (the 40-firmFrench stock index) is $15 billion, and that of theNorwegian stock index (25 firms) is $4 billion.19

According to the European Commission (EC), in2013 the average share of women on boards of thelargest publicly listed companiessegmented by

the largest in each of the 28 member stateswas17.8 percent, a rise of 3.3 percent over the priorthree years (the U.S. Fortune 500 was 16.9 percent).In five countriesFinland (29.8 percent), France(29.7 percent), Latvia (28.6 percent), Sweden (26.5percent), and the Netherlands (25.1 percent)women accounted for at least a quarter of boardmembers.20In the United Kingdom (U.K.), womenoccupy 20.7 percent of FTSE 100 board seats, versus12.5 percent three years ago.21Norway is not anEC member, but women hold 40 percent of publicboard seats, a percentage mandated by a 2003 law.

In June 2014, Corporate Women DirectorsInternational (CWDI) published its annual study,which showed that the percentage of femaleboard directors is now 17.3 percent among theFortune Global 200 companies, compared to 10.4percent in 2004.is gain has been attributed togovernment-mandated quotas in several countries,rather than gradual, voluntary measures.22

ese data support the claim that women arerepresenting an increasingly larger portion ofcorporate boards globally.

Legal Mandates

Belgium, France, Iceland, Italy, the Netherlands,Norway, and Spain currently have government-mandated quotas. Additionally, a number of otherdeveloped economies, such as Australia, Germany,Sweden, and the United Kingdom, have comply

or explain arrangements. Comply or explainregulations fall short of mandates, but they requirepublic disclosure of why government-suggestedapproaches were not followed. Among sizeableemerging markets, India and Malaysia havequotas.e European Parliament passed a quotaproposal in November 2013, and the Council ofthe European Union is reviewing it. Germany, thelargest EU economy, has recently contemplatedquota proposals, but has not passed one into law.


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CEDs Path Forward

e adaptability and cultural diversity of theAmerican economy have contributed to its pasteconomic development, and now are critical toincrease its global competitiveness. Women havesuccessfully integrated into the workforce and havecontributed significantly to economic activity. Aheightened presence of women in board rooms willcontinue this progression and enhance our nationsability to match up against international rivals.

CED believes there is no self-correcting

mechanism to resolve the gender imbalance, andtherefore the problem will not fix itself. Businessleaders must be proactive toward the problem, witha vision toward avoiding intrusive governmentquotas or mandates.

Publicizing the issue, monitoring numericaladvances, educating stakeholders, applying publicpressure, and introducing shareholder resolutionshave moved the needle over the last 10 years.Many organizations have acted, particularly in

the last few years, and women now represent 16.9percent of Fortune 500 board seats, versus 13.6percent ten years ago. Accelerating this headwayrequires these tactics and more.

As part of its singular efforts, CED intends tomobilize its 200+ trustees to begin dialogs withnominating committees and their respectivechairmen through small group meetings. Atpresent, CED trustees occupy seats on 66 Fortune500 boards, and their business colleagues representinroads to many other boards. Our goal is to meet

with 25 representatives of nominating committeesper year for the next three years. e conversationswill focus on why diversity is slow and whatbusiness leaders can do to achieve progress.Aer the first year, CED proposes to publisha paper, without attribution, on nominatingcommittee concerns. CED intends to partner withother public policy groups and business-sectororganizations as needed.

CEDs trustee experience in the boardroomsuggests that the fastest way to achieve changeis for a peer to have a face-to-face meetingwith a nominating committee chair. Privately,the business case can be presented for womendirectors, opposing points of view can be debated,and a diversity request can be made. One executivesearch consultant told CED, ere are just twodegrees of separation between every pair ofFortune 500 directors. If that is the reality, theleveraging of CEDs trustees will enable CEDto reach inside the nominating committeesof multiple Fortune 500 companies within areasonable period of time.

Ultimately, CED hopes that these prominentfirms will consider nominating women for at leasthalf of their newly open board seats, i.e., wherethe incumbent is not being re-nominated. Ifcompanies follow this guideline of Every OtherOne, the Fortune 500 should have a 30 percentfemale board representation by 2018, just four

years from now.


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Endnotes

1. e 2013 Catalyst Census (2013). Retrieved fromhttp://www.catalyst.org/knowledge/2013-catalyst-census-fortune-500-women-board-directors. Severalexecutive search firms and non-profits also publishboard statistics from time to time.

2. Bilimoria, D. (2006). e Relationship BetweenWomen Corporate Directors and Women CorporateOfficers.Journal of Managerial Issues, 18(1), 47-61.Retrieved from http://www.jstor.org/stable/40604524

3. Bohdanowicz, L. (2012). Ownership Structure ofFemale Directors on Two Tier Boards, Evidencefrom Polish Listed Companies. University of Lodz,

Department of Business Management. Retrievedfrom http://ssrn.com/abstract=2117870

4. Lavelle, L. (2013, March 13). Even With a FemaleDean, Most MBAs Are Still Men. BloombergBusinessweek.

5. Barsh, J., Nudelman, S., and Yee, L. (2013, April).Lessons from the Leading Edge of GenderDiversity.McKinsey Quarterly. A yet unpublishedstudy on Norwegian boards (June 2014) supports thisnotion at high levels but less so at lower ranking jobs.

6. FleishmanHillard (2013, July). Women, Power& Money: A Study of Womens Lives, Lifestylesand Marketplace Impact. Retrieved from http://fleishmanhillard.com/wp-content/uploads/meta/resource-file/2013/women-power-money-white-paper-1374761552.pdf

7. Branson, D. (2012). Initiatives to Place Women onCorporate Boards of Directors A Global Snapshot.e Journal of Corporation Law, 37(4), 797-814.Retrieved from http://blogs.law.uiowa.edu/jcl/current-issue/

8. e Spencer Stuart Board Index (2013). Retrievedfrom https://www.spencerstuart.com/research-and-insight/spencer-stuart-us-board-index-2013

9. Securities and Exchange Commission Proxy

Disclosure and Enhancements, 17 C.F.R. 229, 239,240, 249 and 274 (2009).

10. Smallman, T. (2013).e Glass Boardroom: e SECsrole in Cracking the Door Open so Women MayEnter.Columbia Business Law Review,2013(3), 801.

11. See www.30percentcoalition.org/initiatives.

12. CED interview with ISS Governance, a leading proxyfirm, June 12, 2014.

13. CF Industries Holdings, Inc. (2014, April 3). FormDEF 14A, Proxy Statement Pursuant to Section14(a) of the Securities Exchange Act of 1934.Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=190537&p=irol-sec

14. CED interview with institutional investor, June 1,2014.

15. EY (2014). Diversity Drives Diversity: From the

Boardroom to the C-Suite. Retrieved from http://www.ey.com/US/en/Issues/Governance-and-reporting/Diversity-drives-diversity

16. CED interview with Heidrick & Struggles, June 25,2014; CED calculations.

17.e Spencer Stuart Board Index (2013). Retrievedfrom https://www.spencerstuart.com/research-and-insight/spencer-stuart-us-board-index-2013

18. CED calculations, beginning with 913 female boardseats in 2013 and assuming 934 seats (17.3%) in 2014.

19. CED interview with Linn Furwald, Oslo StockExchange, June 5, 2014.

20. European Commission (2014, March). GenderBalance on Corporate Boards: Europe is Crackingthe Glass Ceiling. Retrieved from http://ec.europa.eu/justice/gender-equality/files/documents/140303_factsheet_wob_en.pdf. (Note that the study focuseson the higher-level supervisory boardincludingchair, executive director, senior executives andemployee representatives, where presentwhen anEC firm has two boards).

21. Vinnicombe, S., Doldor, E. and Turner, C. (2014).e Female FTSE Board Report 2014: Crossingthe Finish Line. Cranfield International Centrefor Women Leaders, Cranfield University School

of Management. Retrieved from http://www.som.cranfield.ac.uk/som/se

22. Corporate Women Directors International (2014,June). Women Board Directors in the Fortune Global200: 2004 2014.


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CED Trustees

Co-Chairs

Carl T. CamdenPresident and ChiefExecutive OfficerKelly Services, Inc.

Maggie WilderotterChairman and ChiefExecutive OfficerFrontier Communications

Executive Committee

Beth A. Brooke-MarciniakGlobal Vice Chair, PublicPolicyEY

Michael ChesserChairman and CEO(Retired)Great Plains Energy, Inc.

Robert H. Colson, Ph.D.Distinguished Lecturer ofAccountancyBaruch-CUNY

W. Bowman CutterSenior Fellow and Director,Economic Policy Initiativee Roosevelt Institute

William T. EsreyChairman EmeritusSprint Corporation

Roger W. Ferguson, Jr.President and ChiefExecutive OfficerTIAA-CREF

Henrietta H. ForeChairmanHolsman International

Joseph GantzManaging Director & COOPine Brook Road Partners,LLC

Patrick W. GrossChairmane Lovell Group

Hollis W. HartHead of InternationalFranchise ManagementCiti

Jack A. HockemaChairman, President &CEOKaiser AluminumCorporation

D. Bryan JordanChairman, President andCEOFirst Horizon NationalCorp.

Joseph E. KasputysChief Executive OfficerEconomic Ventures, LLC

Robert J. KueppersSenior Partner - GlobalRegulatory & Public PolicyDeloitte LLP

Lenny MendoncaDirector EmeritusMcKinsey & Company, Inc.

Deborah Hicks MidanekChairman and CEOSolon Group, Inc.

Ronald P. OHanleyFormer President, AssetManagementFidelity Investments

Debra PerryNon-Executive DirectorKorn Ferry International,Inc.

Donald K. PetersonChairman and ChiefExecutive Officer (Retired)Avaya Inc.

James E. RohrExecutive Chairman(Retired)PNC Financial ServicesGroup, Inc.

Patricia F. RussoChief Executive Officer

(Ret.)Alcatel-LucentTechnologies, Inc.

Jacob J. Worenklein, Esq.Chairman & CEO (Retired),US Power GeneratingCompany;Partner & Co-Head ofGlobal ProjectsAkin Gump Strauss Hauer& Feld LLP

Members

Linda L. AddisonManaging PartnerNorton Rose Fulbright

Michael G. ArchboldChief Executive OfficerGNC Holdings, Inc.

Tom ArmstrongChief Executive Officer

Duer Carolina Coil, Inc.

Ian ArnofChairmanArnof Family Foundation

Paul AtkinsChief Executive OfficerPatomak Global Partners,LLC

James BacchusPartnerGreenberg Traurig, LLP

Bernard C. BaileyChairman and CEOAuthentix, Inc.

Douglas M. BakerPresident and ChiefExecutive OfficerEcolab Inc.

Barbara M. BarrettPresident and ChiefExecutive OfficerTriple Creek Guest Ranch

George S. BarrettChairman and ChiefExecutive OfficerCardinal Health, Inc.

Anthony A. BarruetaSenior Vice President,Government RelationsKaiser Foundation Health

Plan, Inc.

Chris BartFounder and Lead Faculty,e Directors College;CEO, Corporate MissionsInc.

Dominic BartonManaging DirectorMcKinsey & Company, Inc.

Lydia I. BeebeCorporate SecretaryChevron Corporation

Peter A. BenolielChairman EmeritusQuaker ChemicalCorporation

David L. BereChairman and CEONonnis Foods, LLC


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16

Nomi M. BergmanPresident

Bright House Networks

Andrea BierceManaging DirectorGupton MarrsInternational, Inc.

Shideh Sedgh BinaPartnerInsigniam

Lee C. BollingerPresidentColumbia University

Angela BralyPresident & Foundere Braly Group, LLC

Sean BratchesExecutive Vice President,Sales and MarketingESPN

Neri BukspanPartner, FinancialAccounting AdvisoryServices

EY

Dave BurwickCEOPeets Coffee & Tea Inc.

Michael M. ByramCEO (Retired)University of ColoradoFoundation

Donald R. CaldwellChairman & ChiefExecutive Officer

Cross Atlantic CapitalPartners

Teresa CarlsonVice President, GeneralPublic SectorAmazon Web Services

Gerhard CasperPresident Emeritus andProfessor of LawStanford University

John J. CastellaniPresident and Chief

Executive OfficerPharmaceutical Researchand Manufacturers ofAmerica

Hiram E. ChodoshPresidentClaremont McKennaCollege

Joseph P. ClaytonPresident and ChiefExecutive OfficerDISH

Cynthia ClevelandCEO and FounderBroadthink/BroadLit

Abby Joseph CohenPresident, Global MarketsInstituteGoldman Sachs Group Inc.

Cynthia CohenPresidentStrategic Mindshare

Martin CohenManaging Director andCorporate SecretaryMorgan Stanley

Douglas R. ConantPresident and CEO(Retired)Campbell Soup Company

Kenneth W. DamMax Pam ProfessorEmeritus of American& Foreign Law & SeniorLecturere University of Chicago

Mitch DanielsPresidentPurdue University

Julie Hembrock DaumPartner and Head of theNorth American BoardPracticeSpencer Stuart

Mike L. DavisExecutive Vice President,

Global Human ResourcesGeneral Mills, Inc.

Michelle FinneranDennedyVice President & ChiefPrivacy OfficerMcAfee, Inc.

Robert L. DilenschneiderFounder and Principale Dilenschneider Group,Inc.

William H. DonaldsonChairmanDonaldson Enterprises

Frank P. DoyleExecutive Vice President(Retired)General Electric Company

Robert H. DuggerFounder and ManagingPartnerHanover Provident CapitalLLC

T. J. Dermot DunphyChairmanKildare Enterprises, LLC

Wade DykePresidentKaplan, Inc.

Terry EakinChairman EmeritusEYA, LLC

Robert EckPresident and ChiefExecutive OfficerAnixter International Inc.

Janice ElligCo-Chief Executive OfficerChadick Ellig

Gerri ElliottExecutive Vice President,Chief Customer OfficerJuniper Networks, Inc.

Diana FarrellGlobal Leader &

Co-founder, e McKinseyCenter for GovernmentMcKinsey & Company, Inc.

Robin A. FerraconeChief Executive OfficerFarient Advisors

Barbara FlanaganPresidentCaledonia Partners

Howard FluhrChairman

e Segal Group

Margaret ForanVice President, ChiefGovernance Officer andSecretaryPrudential Financial

Barbara Hackman FranklinPresident and CEOBarbara FranklinEnterprises;Former SecretaryUS Department of

Commerce

Susan H. FuhrmanPresident,Teachers CollegeColumbia University

Troy GayeskiPartner and SeniorPortfolio ManagerSkyBridge Capital

E. Gordon GeePresidentWest Virginia University

omas P. Gerrity, Jr.Joseph J. Aresty Professorof Managemente Wharton School of theUniversity of Pennsylvania

Raymond V. GilmartinChairman, President &CEO (Retired)Merck & Co., Inc.


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17

Alfred G. GoldsteinPresident and CEO

AG Associates

Timothy B. GoodellGeneral CounselHess Corporation

Bill GoodwynPresident & CEODiscovery Education

Patricia GottesmanAdvisory Board ChairmanNinah/Publicis

Earl G. Graves, Jr.President & CEOBlack Enterprise

Barbara B. GroganChairman EmeritusWestern IndustrialContractors

Ronald GrzywinskiChairman EmeritusShoreBank Corporation

Judith H. Hamilton

President and ChiefExecutive Officer (Retired)Classroom Connect

Robert P. Haney, Jr.PartnerCovington & Burling LLP

Kathy Hopinkah HannanNational ManagingPartner, Global LeadPartnerKPMG LLP

Ben W. Heineman, Jr.Senior Fellow, Schools ofLaw & GovernmentHarvard University

Roderick M. Hills, Esq.ChairmanHills Stern & Morley LLP

Lisa A. HookPresident and CEONeuStar

Lloyd W. Howell, Jr.Executive Vice President

Booz Allen Hamilton Inc.

R. Glenn HubbardDean and Russell L. CarsonProfessor of Finance andEconomicsColumbia University

Henry G. JacksonPresident and ChiefExecutive OfficerSociety for HumanResource Management

Jeremy M. Jacobs, Jr.PrincipalDelaware NorthCompanies, Inc.

Lou JacobsPrincipalDelaware NorthCompanies, Inc.

Larry JensenPresident & CEOCushman & Wakefield/Commercial Advisors

Jeffrey A. JoerresExecutive ChairmanManpowerGroup

Andrea JungPresident and CEOGrameen America, Inc.

Pres KabacoffCo-Chairman of theBoard of Directors & ChiefExecutive OfficerHRI Properties

Edward A. KangasChairman and ChiefExecutive Officer (Retired)Deloitte Touche Tohmatsu

Ronald J. KleinPartnerHolland & Knight LLP

Richard J. KramerChairman, CEO &

Presidente Goodyear Tire &Rubber Company

Randall S. KrosznerNorman R. BobinsProfessor of EconomicsUniversity of Chicago

Barbara J. KrumsiekChair, President and CEOCalvert Investments

omas F. Lamb, Jr.

Senior Vice President,Government AffairsPNC Financial ServicesGroup, Inc.

David H. LangstaffPresident and ChiefExecutive Officer (Retired)TASC, Inc.

Frank G. LaPradeChief Enterprise ServicesOfficer and Chief of Stafftothe Chairman and CEO

Capital One FinancialCorp.

Gregory E. LauManaging Director-Boardof Directors PracticeRSR Partners

James A. LawrenceExec. Vice President andChief Financial OfficerNorthwest AirlinesCorporation

Dawn G. LeporeFormer Chairman andChief Executive Officerdrugstore.com, inc.

David M. LocktonChairman of the BoardLockton Companies

Eugene A. LudwigFounder & Chief Executive

OfficerPromontory FinancialGroup

Tom MaddisonChief Human ResourcesOfficerXerox Corporation

Deborah MajorasChief Legal Officer andSecretarye Procter & GambleCompany

Kathy MarinelloChief Executive OfficerStream Global Services

Bruce K. MacLauryPresident Emerituse Brookings Institution

T. Allan McArtorChairmanAirbus Americas, Inc.

Daniel J. McCarthy

President and ChiefOperating OfficerFrontier Communications

Alonzo L. McDonaldChairman and ChiefExecutive OfficerAvenir Investment Corp.

Martha McGarryPartnerSkadden, Arps, Slate,Meagher & Flom LLP

Patricia A. McKayPartnerTempleton & Co.

Mark D. McLaughlinChairman, President, andCEOPalo Alto Networks

Linda E. McMahonPrincipalMcMahon Ventures


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18

Robert W. Mendenhall,Ph.D.

PresidentWestern GovernorsUniversity

Harvey R. Miller, Esq.PartnerWeil, Gotshal & MangesLLP

Alfred T. MockettChairmane Hibu Group

Paul M. Montrone

ChairmanLiberty Lane Partners

Nicholas G. MooreDirectorBechtel Group, Inc.

Jennifer NasonGlobal Chairman,Technology, Media andTelecommunicationsInvestment BankingJ.P. Morgan Chase & Co.

Diana S. Natalicio, Ph.D.Presidente University of Texas atEl Paso

omas C. NelsonChairman, President &CEONational Gypsum

Susan NessSenior Fellow, Center forTransatlantic RelationsJohns Hopkins School ofAdvanced InternationalStudies

Laurie NordquistExecutive Vice President,Institutional Retirementand TrustWells Fargo & Co.

Justus J. OBrienPartnerEgon Zehnder

Hilda Ochoa-BrillembourgPresident and Chief

Executive OfficerStrategic Investment Group

Steve OdlandChief Executive OfficerCommittee for EconomicDevelopment

John F. OlsonPartnerGibson, Dunn & CrutcherLLP

Nels Olson

Vice Chairman and Co-Leader, Board and CEOPracticesKorn/Ferry International,Inc.

Steffen E. PalkoPresident and ViceChairman (Retired)XTO Energy Inc.

Carol J. ParryPresidentCorporate Social

Responsibility Associates

William C. PateCo-PresidentEquity Group Investments,LLC

Gregg PetersmeyerChairman and CEOPersonal Pathways, LLC

Peter G. PetersonFounder and ChairmanPeter G. PetersonFoundation

Todd E. PetzelManaging Director andChief Investment OfficerOffit Capital Advisors LLC

Sally PhippsDirector, GlobalContributionsColgate-PalmoliveCompany

Steven C. PrestonCEO

Livingston InternationalInc.

Doug PricePresident and CEORocky Mountain PBS

omas J. Quinlan IIIPresident and CEORR Donnelley

Catherine ReynoldsPresident & CEOCatherine B. Reynolds

Foundation

R. Timothy RiceChief Executive OfficerCone Health

Bill RichardsPresidentSUNY Orange

Alice M. RivlinSenior Fellow, EconomicStudiese Brookings Institution

Michael RobinsonChief Executive OfficerBroadview Networks

Daniel RoseChairmanRose Associates, Inc.

Nathan O. RosenbergFounding Partner -CaliforniaInsigniam

Landon H. RowlandChairman of Lead Bankand Ever Glades Financial

Edward B. Rust, Jr.Chairman and CEOState Farm InsuranceCompanies

Nina SaberiManaging PartnerCastile Ventures

Stephen W. SangerFormer Chairman and

Chief Executive OfficerGeneral Mills, Inc.

Maria A. SastrePresident and ChiefOperating OfficerSignature Flight Support

Dean A. ScarboroughPresident and ChiefExecutive OfficerAvery Dennison

Mary Schapiro

Advisory Board Vice ChairPromontory FinancialGroup, LLC

George SchindlerPresident, U.S. and CanadaCGI

Elliot S. Schreiber, Ph.D.ChairmanSchreiber Paris, LLC

Larraine SegilChairman

e Committee of 200Foundation

John E. SextonPresidentNew York University

Jane SherburnePrincipalSherburne, PLLC

Gregg SherrillChairman and ChiefExecutive OfficerTenneco, Inc.

Gary ShorbPresident and CEOMethodist HealthcareCorporation

Frederick W. SmithChairman, President andCEOFedEx Corporation


19/20

19

Richard K. SmuckerPresident and Co-Chief

Executive Officere J. M. SmuckerCompany

Jeffrey SonnenfeldSenior Associate Dean, YaleSchool of ManagementYale University

Robert J. StanzioneChief Executive Officer,ChairmanArris Group Inc.

Scott SteffeyPresident and CEOCareer Education Corp.

Jon StellmacherSenior Vice President(Retired)rivent Financial forLutherans

Paula SternChairwomane Stern Group, Inc.

Roger W. StoneChairman and CEOKapStone Paper andPackaging Corp.

Stephen M. SwadPresident & CEORosetta Stone

Frederick W. Telling, Ph.D.Vice President, Corporate

Policy & StrategicManagement (Retired)Pfizer Inc

Davia B. TeminPresident and ChiefExecutive OfficerTemin and CompanyIncorporated

G. Richard omanChairmanCorporate Acquirers, Inc.

Larry D. ompsonEVP Government Affairs,General Counsel &Corporate SecretaryPepsiCo, Inc.

Patrick ToolePortfolio Management &Offering DevelopmentIBM Corporation

Tallman Trask, IIIExecutive Vice PresidentDuke University

Sara M. TuckerCEONational Math + ScienceInitiative

James S. TurleyChairman and Global

Chief Executive (Retired)EY

Myron E. Ullman, IIIChief Executive OfficerJCPenney Company, Inc.

Daisy VanderlindeChief Human ResourceOfficerGNC

Robert S. WalkerExecutive Chairman

Wexler & Walker PublicPolicy Associates

Ben WalterCEOHiscox USA

Delroy WarmingtonManaging PartnerDelwar CapitalManagement LLC

Christine B. WhitmanChairman, CEO, and

PresidentComplemar Partners, Inc.

Jon WhitmoreChief Executive OfficerACT, Inc.

Scott WielerChairman

Signal Hill

John C. WilcoxChairmanSodali Ltd.

Harold M. WilliamsPresident EmeritusGetty Trust

Ronald A. WilliamsChairman and ChiefExecutive OfficerRW2 Enterprises

Michael WilloughbyChief Executive OfficerPfsweb Inc.

John B. WoodChief Executive Officer andChairman of the BoardTelos Corporation

David R. YoungExecutive ChairmanOxford Analytica

Ronald L. ZarrellaChairman EmeritusBausch & LombIncorporated


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Every Other One:More Women on Corporate BoardsAn Update of a Policy Statementby the Committee for Economic DevelopmentsPolicy & Impact Committee

Includes bibliographical references.

First printing in bound-book form: 2014

Printed in the United States of America

Committee For Economic Development

2000 L Street, N.W., Suite 700Washington, D.C., 20036202.296.5860

every other one - more women on corporate boards

Documents