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Good news dept.: Industry ahead on female directors

Tuesday, January 7, 2014   (0 Comments)
Posted by: Barbara Francella
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By Barb Grondin Francella

The wheels of change turn slowly, but when profits provide a push, they turn a bit faster.

As the NEW "Women 2020" report revealed, women are still greatly underrepresented in leadership roles in the retail and consumer goods industry, but the business case for gender equity is strong -- and savvy organizations are getting on board.

A new study supports the "Women 2020" findings and shows the retail/consumer goods industry taking the lead in recognizing the business benefits of female leadership.

Nearly 80 percent of the world’s largest retail/consumer goods companies now have at least one woman director, according to "Women Board Directors of Top Retail and Consumer Products Companies Globally,” a recent report by Corporate Women Directors International (CWDI) that studied 168 retail/consumer goods companies with at least $1 billion annual revenue in 26 countries.

This industry has more gender diverse boardrooms than the Fortune Global 200 community, where 76.5 percent of companies have one or more female directors. In fact, no industry has a higher percentage of companies with women board directors. Healthcare holds the second spot, with 72.3 percent of its 100 largest firms boasting at least one woman director.

One is nice, but more is better. The retail/consumer goods industry also outperforms the Fortune Global 200 in the depth of women’s board representation. Eighteen percent of the industry’s directors are women, compared to 15 percent serving on Fortune Global 200 boards.

U.S. companies take action

While relatively few women are promoted to top positions only seven women held CEO posts in the retail/consumer goods companies studied worldwide U.S. organizations, especially, are going beyond tokenism in the boardroom. Among the 15 global companies with the highest percentage of women directors are U.S.-based Avon Products, ranked first with women in 60 percent of its board seats, and NEW sponsors Procter & Gamble, Hormel Foods Corporation, Campbell Soup Company and General Mills Inc., which all have at least one third of their board positions held by women. Estee Lauder, Macy’s, Williams-Sonoma, TJX Inc., PVH Corporation (Calvin Klein, Tommy Hillfiger and other brands), Coach Inc. and Foot Locker do, too.

This is good news for women, for investors and the bottom line. As Catalyst reported in 2011, companies with three or more female board members saw an 84-percent higher return on sales, a 60-percent higher return on investment capital and a 46-percent higher return on equity than companies with no female board members in at least four of the five years analyzed.

Change, of course, starts at the top. Having a woman at the helm makes a huge difference in the makeup of a company’s leadership. The CWDI report backs this up: Companies with a woman CEO or board chair have almost double the percentage of women on their boards than its survey’s average  — 35.8 percent vs. 18.4 percent.

Still, retail/consumer goods companies especially retail companies are still a long way from achieving gender parity. Women hold 16.2 percent of board seats at the world’s largest retailers, compared to 22 percent at consumer products companies. At food retailers, women represent just 13.6 percent of board directors.

The CDWI report is full of numbers to chew on. But considering the many business benefits of gender diversity more (and often more relevant) views sparking innovation, a leadership team that reflects customers, a stronger reputation as an employer to attract top talent, and a larger talent pool to draw from many of the numbers are still hard to swallow.

Barbara Grondin Francella is communications manager for the Network of Executive Women.

Views expressed in signed blogs and user comments are those of the authors and do not necessarily reflect the opinions of the Network of Executive Women or its Officers, Board members and sponsors.

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