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Minnesota companies lack gender diversity at the top, St. Kate's study finds

Left to right: Joann Bangs, Ph.D. and Rebecca Hawthorne, Ph.D. authors of The 2010 Minnesota Census of Women in Corporate Leadership.
Left to right: Joann Bangs, Ph.D. and Rebecca Hawthorne, Ph.D. authors of The 2010 Minnesota Census of Women in Corporate Leadership.
Photo by Rebecca Zenefski '10.

Seventy-two board seats became available at the largest 100 publicly traded companies in Minnesota in 2010. Fourteen of those seats were awarded to women. Nineteen of the state’s largest corporations have no women board members and no women executive officers in their ranks.

Those statistics show “stalled progress and missed opportunities,” according to The 2010 Minnesota Census of Women in Corporate Leadership, an annual survey conducted by two professors in the Master of Arts in Organizational Leadership (MAOL) program at St. Catherine University.

St. Kate’s collaborates with the Minnesota Women’s Economic Roundtable on the annual survey, which examines the percentage of women serving on boards and as executive officers of Minnesota’s 100 largest publicly held corporations.

Now in its third year, the Minnesota Census is part of a national initiative by ION (InterOrganization Network), a nonprofit organization dedicated to advancing women in corporate leadership. In the 14 regions represented by ION’s members, women hold between 8.3 percent and 18.4 percent of the board seats in the companies included in those regions’ research.

In Minnesota, women hold 14.3 percent of the available board seats in the state’s top public companies. Women directors of color hold only 1.7 percent of the available seats. By contrast, Minnesota leads the nation in the percentage of its executive officer seats — 16.3 percent — held by women.

“Minnesota looks good nationally,” says Census co-author and Assistant Professor of Economics Joann Bangs, Ph.D. “But being the best of the worst is not something you can be proud of.”

Given the difference that chief executive officers can make in diversifying their boards and upper management, this year’s Census makes a special effort to publish the names of CEOs who head companies that are doing well —and others that are doing poorly — in diversifying their senior ranks.

Stuck in the middle

Women comprise 48 percent of the paid labor force and account for more than half of all managerial or professional positions nationwide, according to data cited in the Census. But despite their growing influence in the labor market, women have “stalled” at middle management, the report’s authors contend.

“Women make up more than half of the workforce, but until gender inequity at the top ranks of corporations is no longer seen as a women’s issue, we won’t see progress,” says Census co-author Rebecca Hawthorne, Ph.D., program director and an assistant professor in the MAOL.

Her co-author agrees. “There’s a myth of a meritocracy in the United States,” says Bangs, an associate professor of economics who teaches in the MAOL program at St. Kate’s. “According to that thinking, it’s women’s fault that they don’t ascend to the most senior positions in our country’s corporations.”

In fact, a growing body of data shows that companies’ financial performance is tied to diversity in their leadership ranks, according to the 2010 Census. More collaborative approaches to leadership are among the “substantive contributions” that women make to corporate boards, according to a Harvard Business Review article cited in the report.

Perhaps most disturbing, say Hawthorne and Bangs, is the lack of progress reflected in this year’s Census report. Consider:

  • The number of corporate board seats held by women at Minnesota companies declined by three seats between 2009 and 2010.
  • The number of companies with at least three women directors — the “critical mass” required to allow women to be seen as “individuals with unique skill sets and voices” rather than “representatives of their gender,” according to the Census — fell from nine to six this year.
  • Four companies had a net loss of women directors since 2009.

The state’s leaders

Among the standout corporations in the 2010 Minnesota Census are Target Corp., MTS Systems Corp. and CyberOptics Corp. — all three of which earned “special distinction” status for the second straight year. Special distinction companies are those in which women hold at least 30 percent of board seats and represent at least 30 percent of corporate officers.

Target and MTS Systems have been special distinction companies for all three years that the Minnesota Census has been produced. Two of the special distinction companies — CyberOptics and MTS Systems — have women serving as chief executive officers.

Ten additional companies made the Census honor roll this year for having at least 20 percent of their boards and at least 20 percent of their executive suites made up of women.

The report details concrete actions that business leaders — both men and women — can take to alter the face of corporate leadership. “This issue is less visible in the United States than it is in Europe,” Hawthorne explains.

According to the national report released by ION in March, a growing number of countries have enacted statutes or regulations for board diversity — ranging from quotas in France, Ireland, Norway and Spain to directives that require companies to ensure more gender equity.

In the United States, the Securities and Exchange Commission (SEC) “now requires listed companies to disclose the manner and extent to which they take diversity into account when nominating directors,” the ION report says, “but has left it up to each company to define diversity as it wishes.”

About the Minnesota Census

Data for The 2010 Minnesota Census of Women in Corporate Leadership were drawn from SEC filings as of June 30, 2010.

Four St. Kate's alumnae were named in the Census: Paula J. Savik Patineau '76, a senior vice president at Alliant Techsystems; Janet M. Dolan '70, a board member of the Donaldson Co. Inc.; Linda Theis Thrasher '88, a member of the St. Kate's Board of Trustees and a vice president at the Mosaic Co.;  and Leah A. Regenfuss Goff '84, a vice president at Winmark Corp.

The Census was published in the April 1, 2011, edition of the Minneapolis/St. Paul Business Journal and is available online.

April 1, 2011 by Amy Gage

See also: Business, Faculty, Leadership