A good reason to aspire for more women on boards

Minnesota ranks third among the states when it comes to female representation on public company boards, according to a national study by researchers at the College of St. Catherine in what they bill as a first-ever, gender-based look inside the state's boardrooms. 

Minnesota falls behind New York and Illinois.

Still, fewer than one in six directors among Minnesota's 100 largest public companies is a woman. And 28 of the 100 firms have no female directors.

Target, the huge retailer, and MTS Systems, an Eden Prairie-based engineering and testing firm, were singled out for special praise because women represent more than a third of their executives and board members.

"This is a clarion call for diversity more so than just gender stereotypes," said Rebecca Hawthorne, one of the study's authors. "You need multiple perspectives and differing viewpoints for good corporate governance. Once you reach a critical mass, say three directors, they are allowed to disagree. One woman speaks for all women whether she wants to or not. That's the way she's perceived. And the same would hold true with people of color.

"The dynamics of the entire board change when you hit three women,'' Hawthorne said. "And a well-functioning board will have a female member on the nominating committee."

Emerging research indicates the best-governed and successful companies also tend to boast women and minorities throughout the upper ranks and boardrooms.

"Diversity of people and points of view are key contributors to a successful board," said John Stout, a partner at Fredrikson & Byron, board adviser and chairman of the National Association of Corporate Directors Minnesota chapter, a co-sponsor of the study.

The rap on corporate boards typically has been that the directors are pulled from pools of CEOs who are largely white, affluent and members of the so-called "old boy" network. Often interlocking networks from that same crowd sit on each others' boards. Industrial psychologists and researchers say it can lead to "group think" and a reluctance to challenge the CEO.

We've seen plenty of that in the aftermath of the subprime crisis and credit markets meltdown.

"I didn't do anything in particular to try and get such a diverse officer or board group, but I did learn over the years that diversity is a valued trait in almost any organization in terms of different ideas and out-of-the-box thinking," said Chip Emery, the retired CEO of MTS Systems, who was succeeded by Laura Hamilton, a woman he hired about a decade ago. "A smart guy hires people who, 'wink, wink' are smarter than you, even though you may not like to admit it. And the smart people with bright ideas are not all 60-plus white guys like me."

Emery is an engineer, a graduate of the U.S. Naval Academy and a guy who came up through a profession that's typically male-dominated.

In an interview, Emery, who retired from MTS last year, said he was influenced by Linda Hall Keller, the sole woman on MTS' board when he joined the company more than a decade ago. Keller helped him recruit additional women to the board, including Barb Smardzich, vice president of powertrain engineering at Ford Motor Co., and Lois Martin, chief financial officer of Cappella Education.

Susan Boren, a onetime corporate financial officer who now places executives and recruits board members for placement firm Spencer Stuart, said America's largest corporations are making glacially slow progress in diversifying boardrooms. At the same time, there is a growing cadre of females and minority candidates with professional, corporate and other experience who could increasingly serve on the boards of smaller companies where there often are no board members other than white males.

The St. Catherine report cited 16 Minnesota public companies where there are no female senior executives or directors, including ATS Medical, Digital River and Life Time Fitness. Conversely, more than 50 local public companies have at least one female in the executive and board ranks, including ADC Telecommunications, Best Buy, Donaldson Co. and General Mills.

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com