Director diversity: new dimensions in the boardroom.

• Author: Vance, Stanley C.
• Position: Reprint from Directors & Boards, Spring 1977 - Putting In Place the Right Board for the 21st Century

A DRAMATIC RENOVATION of the corporate boardroom is currently underway. It is so total that even the ectoplasms of yesterday's captains of industry, fixtures in most of our venerable boardrooms, will probably be forced to vacate their hallowed haunts. Ironically, this remodeling is being mandated and supervised not by the respective boards of directors (or their chairmen) but rather by restive stockholders, an annoyed public, and eager-to-act governmental agencies.

Much of the boardroom modernizing stems from an increasing focus on individuals' rights to know not only the names of corporate directors/trustees, but also how they perform and "what's in it for them." This right to know is a complete reversal of yesterday's seal of silence which effectively insulated boardrooms from the outside world.

For example, 27 years ago, when as a neophyte researcher I tried to gather first hand data for a study, of boardroom structure and performance, I ran into an abysmal shroud of secrecy and even experienced some open hostility. In one notable interview when I inquired as to what the board of directors really did, I was brusquely told by a top executive that "it was none of my business" since it was universally assumed that absolute secrecy in boardroom activity was an essential ingredient in free enterprise and any news leakage, even to major stockholders, might be advantageous to competitors.

The social activism of the 1960s led to pressures on boards of directors to admit women, blacks, consumers, and representatives of other previously excluded or overlooked groups. Although women had been accepted as directors since the 1930s when Mrs. Henry Ford, Mrs. Merriweather Post and Mrs. Claire Gianinni Hoffman occupied seats on family-run enterprises, their acceptance was both conditional and exceptional. As late as 1974, only 96 women served as directors in our largest 550 firms, in sharp contrast to approximately 7,200 males. By 1977 the number increased to nearly 400. But despite this increased acceptance, adding a woman to a major company's board still occasions headlines, as when Gertrude G. Michelson, senior vice president of Macy's, became General Electric Co.'s first woman director (Editor's note: in 1976).

Blacks also are only conditionally welcomed and since...