Worcester Business Journal

6 Worcester Business Journal | March 5, 2018 | wbjournal.com Financial, legislative and cultural pressures are creating more gender diverse business leadership BY GRANT WELKER Worcester Business Journal News Editor Narrowing The Boardroom Gap I n 2011, when Susan West Engelkemeyer became the second female president in the 203-year history of Nichols College, every administrator who reported to her was a man. For the Dudley college that was all-male until 1974, it was a remnant of a past era. It quickly changed. "It wasn't that we will only hire women, but we made sure that in the candidate pool, we always include female candidates and minority candidates," Engelkemeyer said. Now, three women are among the seven on Engelkemeyer's cabinet. "We've added some remarkable women in recent years," she said. For a series begun Feb. 5, a Worcester Business Journal investigation into the gender makeup of the leadership of 75 organizations found women comprise 33 percent of senior executive and board seats locally, though that figure was skewed by a handful of social ser- vice nonprofits. At Central Mass. public companies, only 8 percent of top execu- tives and 16 percent of board are women. Three companies hadn't had a female executive or board member in at least two decades, and 12 didn't have a single female executive last year. But nationally and locally, business leadership is moving toward greater gender equality through legislative changes, new and long- time advocacy, investors pushing for the value diversity brings, and pres- sure for cultural changes stemming from the #MeToo movement. "Customers, employees and inves- tors are looking at the leadership of companies and noting the absence of women," said Brande Stellings, senior vice president for advisory services at the national nonprofit women's advo- cate Catalyst, based out of Wall Street in New York City. Financial pressures Because companies with greater gender diversity in leadership have better performance records – a 2016 study by Swiss multinational financial institution Credit Suisse found compa- nies with women in at least 15 percent of senior management positions have 18 percent more profits than compa- nies where women comprise less than 10 percent of those seats – investment firms like State Street of Boston and BlackRock of New York are pushing their portfolio companies to add more women. State Street wrote to companies it invests in last March saying it would vote against the chair of a company's nominating committee if there were no female directors or candidates for the board of directors. BlackRock said its priorities this year will include working with companies to better understand their progress on improving gender balance in the board- room. If companies don't make prog- ress in a reasonable time frame, BlackRock said it would take unspeci- fied action. BlackRock CEO Larry Fink pitched in his 2018 letter to executives the benefits a diverse board can bring. In Massachusetts, the board oversee- ing the state government's $62-billion pension fund votes against or in absten- tion for board-member appointments at any of its 9,000 portfolio companies without at least 30 percent of their board members female or minorities. Last year, 60 percent of the compa- nies in the pension fund didn't meet that requirement. The pension board's policy is largely symbolic – the fund has not divested from any of these companies – but it allows the fund to advocate for policies it believes foster better long-term growth and stability, said State Treasurer Deborah Goldberg, who chairs the The Boardroom Gap THIRD IN A THREE-PART SERIES State Treasurer Deborah Goldberg oversees the state's pension board, which votes against or in abstention for board appointments at portfolio companies that don't meet diversity benchmarks.

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