CED report: 'look harder'.

• Author: Brooke, Beth
• Position: BOARD DIVERSITY

Ed. Note: Aggressive action must be taken by U.S. companies to advance women to corporate board positions to ensure that the U.S. remains competitive in the global economy. That is a central proposition put forward in a report released in June 2012 by the Committee for Economic Development (CED). Titled Fulfilling the Promise: How More Women on Corporate Boards Would Make America and American Companies More Competitive, the CED report highlights the most recent data on women in top corporate roles and identifies six key findings and recommendations for reform. One of its recommendations is that nominating committees need to do more to demand women candidates. An excerpt from the report follows.

Board nominating committees often say that the small number of women on boards is due to the small number of perceived candidates in the pipeline. Our review leaves us doubtful about whether this is true or just a perception by (mostly male) nominating committees. It may be because nominating committees set criteria for board membership that are too narrow, thus filtering out female candidates who might be qualified were it not for the lack of a CEO credential.

Many organizations maintain long lists of female candidates qualified for board positions. The organization WomenCorporateDirectors (WCD), for example, has over 1,350 members serving on over 1,500 boards worldwide. At present, board candidates are mostly drawn from a pool of senior corporate managers; sitting and former CEOs are most sought after. Women are under-represented in this target group, even more than they are in boards. In 2011, only 14 women held the position of CEO in a Fortune 500 company. With the addition of Virginia Rometty at IBM and Meg Whitman at Hewlett-Packard, among others, this number rose to 18 in 2012. Another 21 women were CEOs of the next 500 companies ranked by Fortune (numbers 501-1000). In the next-lower management tier, women represented only 8.4 percent of the highest-paid positions within the S&P 100.

When the outcome of a labor market is that fewer of an identifiable class of participants are hired than one might normally expect, analysts often look to determine whether there is evidence of bias in hiring. And researchers have looked for the existence of bias in the market for corporate directors. Overt bias has been hard to detect, but analysts have found evidence of tacit discrimination based on cultural factors, such as...