This week, senior business executives in 17 cities across the country will talk about diversity on corporate boards and how to increase the number of women to 20 percent or more by the year 2020. We applaud these efforts, knowing much more needs to be done to raise the presence of women at the top of corporate America.
The goal for 2020 is set low, but in California, the majority of the largest public companies have a long way to go to reach even that mark.
Women hold only 12.3 percent of board seats and the highest-paid executive positions at the 400 largest public companies headquartered in California, according to the annual UC Davis Graduate School of Management study being released Tuesday. That’s a tiny improvement of 0.7 percentage points over last year, even in a state that is one of the most progressive.
In the public sector, efforts to increase the representation of women have made more progress. Nationally, women hold 20 percent of U.S. Senate seats, 19 percent of U.S. House seats and more than 20 percent of seats in state legislatures.
In the corporate sector, we have yet to truly understand and act on the need for more diverse leadership. The role of these firms in all of our lives, however, requires us to pay more attention to this issue. Together, the 400 Golden State companies represent nearly $5 trillion in stock market value and include global leaders in technology, health care, consumer products and pharmaceuticals. These companies dominate their markets and offer familiar products and services.
Yet only two – Williams-Sonoma based in San Francisco and LTC Properties in Westlake Village – have at least as many women as men in top executive positions and board seats.
On the bright side, progress is being made over the long term. The number of women in these key decision-making roles has inched up from 9.6 percent in 2010 to 12.3 percent today. This year, the number of companies with no women board members and executives dropped below 100 (to 92) for the first time in the 11 years of our study.
The number of female CEOs is on the rise, up from 14 to 17, a 21 percent increase this year, and a 55 percent increase since 2006. Companies with female CEOs also have, on average, 38 percent more women among their highest-paid executives and board directors.
Universities and business schools in particular must lead in helping companies and their leaders adapt to meet the needs of the 21st-century workforce. We will continue to monitor trends, break down barriers and provide equal opportunity for our graduates.
In August, the UC Davis Graduate School of Management joined 45 peer business schools at the White House to focus on opportunities to work with corporations to encourage success for women in business and to help companies incorporate the full range of talent and diversity of workers.
We call on business leaders to take a hard look at the diversity of perspectives, backgrounds and experience on their teams. If you do not see many women, your firm and your stockholders may not be as well-positioned as possible to keep your company competitive and adequately address the risks, challenges and opportunities ahead.
Linda P.B. Katehi is chancellor of the University of California, Davis. Ann Huff Stevens is a professor of economics and dean of the UC Davis Graduate School of Management.