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Women, minorities still have small presence in boardrooms

By Blanca Torres
Seattle Times business reporter

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Four years into the 21st century and most corporate boards still look like they did 100 years ago — what one expert called "mostly pale, stale and male."

It's true, times have changed. More women and people of color are joining the ranks of public-company directors, but in small and sometimes inconsistent increments.

The demands of the Sarbanes-Oxley corporate-reform legislation, enacted in July 2002, are prompting companies to broaden the pool from which they pick board members, potentially creating an environment ripe for women and people of color to increase their representation in the boardroom.

"Sarbanes-Oxley has become a catalyst to increase the demographic diversity of Fortune 1,000 directors," said Alfonso Martinez, chief executive of the Hispanic Association on Corporate Responsibility. "Boards are required to have more independent directors, and therefore boards will need to cast a wider staffing net in order to find more candidates."

However, the opportunity has yet to translate into significantly higher numbers for women and minorities.

"The bottom line is we see very little improvement in the recruitment or nomination of women and people of color," said Roger Raber, president and chief executive of the National Association of Corporate Directors, an organization representing some 15,000 board members.

In Washington, there are fewer women directors this year than last. A Seattle Times analysis shows women in 62 director posts — or 9.1 percent of the board seats at publicly traded companies based in the state. About 48 percent of the companies have no women directors.

Women lost a little ground from last year, when 68 board seats, or 9.3 percent, were held by women and 46 percent of companies had no women directors.

Few companies have more than one or two women directors. Only one company based in the state, Washington Mutual, has four women on its board, making it almost 31 percent female.
 
Nationally, women comprised 13.4 percent of Fortune 500 board seats in 2003, according to Catalyst, a research organization that tracks women in business. Catalyst's bi-annual figures show that last year's percentage increased from 2001, when women held 12.4 percent of board seats.

The corporate directors' group reported in 2000 that the number of boards with minority directors had risen to 25 percent.

But the association stopped tracking minorities that year, because it was hard to collect the data from companies.

"There's boards that have good representation on them," said Mark Ross, chief executive of Microquest, a research group based in Novato, Calif. "And then there's boards that look like the 1950s."

According to Microquest, 449 or 4 percent of board seats at the Fortune 1,000 companies in 2002 were held by minorities. For this year, the figure climbed to 639 or 6 percent.

Hispanics comprised fewer than 2 percent of directors for Fortune 1,000 companies in 2003, and 83 percent of those companies do not have any Hispanics on their boards, according to research by Martinez's group.

That vastly under-represents Hispanics' economic impact, Martinez said. "U.S. Hispanics make up the eighth-largest economy in the world and 70 percent of us live in five states. Our message is that there are a lot of us and we have a lot of money and we're really easy to find."

There are signs that at some companies, diversity at the board level has become less of a priority.

This year's annual governance study by the National Association of Corporate Directors found that only 57 percent of board nominating-committee members favored diversity initiatives to attract more women and people of color as directors — down from 67 percent last year.

The group offered one rationale: "The decline could indicate that boards are already becoming more diverse and do not require such initiatives." Another possible explanation may be that Sarbanes-Oxley's emphasis on policing corporate behavior has pushed other issues farther down the agenda.

Raber, chief of the national corporate directors' group, said various groups have worked for years to make companies recognize that increasing diversity is a good business decision. Despite seminars, literature and databases, impressive results simply haven't happened.

"We need to be angry at this — I am," Raber said. "We've been out there promoting this ad nauseum."

Phyllis Campbell, chief executive of The Seattle Foundation, who serves on the boards of Alaska Air Group, Puget Energy and Safeco, agreed.

"People have to be insistent," she said. "It's going to take one person on a board who really gets that it's good business."

Instead of executives seeking out other executives, Martinez said, companies searching for board members can broaden their spectrum to include entrepreneurs, university or college presidents, and community leaders who have administrative experience.

Potential board candidates also can improve their prospects. Susan Strautberg, president of PartnerCom, a New York company that assembles and manages corporate advisory boards, has organized two seminars called "On Board Bootcamps" that teach eligible executives the basics of serving on a board and provides networking opportunities for them to combat the "mostly pale, stale and male" dynamic.

"We've found some very good candidates, but they don't know how to package themselves," Strautberg said. "Interviewing for a board is very different from interviewing for a job. Boards are social groups, candidates need to learn to disagree in an agreeable manner."

Blanca Torres: 206-515-5066 or btorres@seattletimes.com