Research shows gains in women's corporate leadership
St. Catherine University professors Joann Bangs and Rebecca Hawthorne have been compiling data for each of the past six years about the numbers — and influence — of women corporate leaders in Minnesota.
For the first time, they are cautiously optimistic.
Even though women comprise only 18.6 percent of executive officers at the state’s largest companies, and less than 15 percent of board members in the same data set, the numbers are looking up, the researchers say.
Bangs, an economist by training, explains: “If you look at the change in the percentage of women corporate officers between 2012 and 2013, and apply that growth rate annually, you could hit 30 percent by the year 2020 — if we could just maintain that rate of change.”
The percentage of women executive officers rose by 1.2 points this past year. That seemingly miniscule number matters, says Hawthorne, because top leadership roles are a proven pipeline to the boardroom. And women are less well represented there.
“Companies need to build a balanced pipeline of executives,” explains Hawthorne, director of the Master of Arts in Organizational Leadership (MAOL) program at St. Kate’s. “They need a process to examine leaders, from the top of the ladder on down, to see what leadership development opportunities will benefit them. Creating metrics and pushing accountability is critical if highly qualified women are going to be developed.”
The Minnesota Census of Women in Corporate Leadership is an annual collaboration between St. Catherine University and the Minnesota Women’s Economic Roundtable. Begun in 2008, the research examines the percentages of women board members and executive officers (as defined by the Securities and Exchange Commission) in Minnesota’s top 100 public companies.
This year’s report recorded the highest percentage of women on boards and in executive roles in the Census’ six-year history.
Diversity drives performance
Beyond the obvious argument — equity — why does gender diversity matter? This year’s Census delineates six reasons, from improved financial performance and leverage of talent to increased innovation and a more accurate reflection of who makes buying decisions in our families and society.
“Research shows that gender diversity makes for a better decision-making process,” says Bangs, interim dean of the School of Business and Professional Studies and chair of the Department of Economics at St. Kate’s.
“People from diverse backgrounds tend to ask different questions and having that discussion leads to better decisions,” she explains. “Research also shows that companies with diverse boards tend to do better financially.”
Hawthorne follows national and international research on the topic of women’s corporate leadership. She’s a strong advocate of the notion that three women is the minimum necessary to change the culture and dynamics of a board. “The research on women in corporate leadership shows that you need critical mass [of at least 30 percent] to shift the leadership model or paradigm,” says Hawthorne, citing a 2007 study by McKinsey & Company, “Women Matter: A Corporate Performance Driver.”
No surprise, then, that Bangs and Hawthorne devised an annual Honor Roll in the Census that showcases “Special Distinction” companies with boards and executive suites made up of at least 30 percent women. The other Honor Roll companies have boards and top executive ranks comprised of at least 20 percent women.
Christopher & Banks, CyberOptics, MTS Systems and Select Comfort achieved Special Distinction status this year. All but MTS Systems have women as chief executives.
“Women at the top tend to create more leadership opportunities for women,” Hawthorne says. “Their influence can include reaching out to offer feedback and providing support for women’s careers.”
In fact, this year’s Census has a record number of female CEOs, with women leading seven of the state’s top 100 public companies.
Learn more about the Minnesota Census
The full, 24-page report is distributed in the April issue of Twin Cities Business magazine and published on the St. Catherine University website. The Census is part of a national research initiative by ION (InterOrganization Network), which advocates for women leaders in business and includes 17 regional women’s organizations as members.