Exec Pipeline Key to Diverse Boards

There’s a new way to look into the future and predict the number of women in senior management ranks – just count the current number of women on corporate boards.

The number of women on a company’s board is directly connected to the future number of women in its senior management ranks, according to Catalyst’s "Advancing Women Leaders: The Connection Between Women Board Directors and Women Corporate Officers."

The New York-based advocacy group  says this "compelling predictor shows a way to increase the number of women in leadership." Its new findings also support earlier research that found a correlation between financial performance and gender diversity.

That analysis revealed that Fortune 500 companies with the largest representation of women board directors and corporate officers achieve, on average, higher financial performance.

Women in corporate leadership can also send a critical message to people entering the workforce. “Women leaders are role models to early- and mid-career women and, simply by being there at the top, encourage pipeline women to aspire to senior positions. They see that their skills will be valued and rewarded,” said Catalyst President Ilene H. Lang.

Catalyst says its latest research "shows a clear and positive link" between the percentage of women board directors in the past and the percentage of women corporate officers in the future:

• Companies with 30 percent women board directors in 2001 had, on average, 45 percent more women corporate officers by 2006, compared to companies with no women board members.

• Companies with the lowest percentages of women board directors in 2001 had, on average, 26 percent fewer corporate officers than those with the highest five years later.

• Companies with two or more women members on a company’s board in 2001 had 25 percent more women corporate officers by 2006 than companies with one woman board member in 2001.

Furthermore, the presence of women on boards had a stronger impact on the growth of women in line positions than in staff positions. Line experience is necessary for advancement into CEO and top leadership positions, and Catalyst’s annual censuses show that women are historically underrepresented in these roles.

The latest research demonstrates the important contribution that women board directors play in making sure women get this critical experience.

“A gender diverse board signals the right tone at the top and the importance that a company places on creating a successful work environment for all employees,” said Lang. “Moreover, this study shows that what’s good for women is good for business. Simply put, more women on corporate boards correlate with more women in the C-suite and better financial performance – a real win/win for companies, shareholders, and talented women seeking companies that support their advancement.”