The percentage of women on the boards of S&P 500 companies is still only 20 percent, making little progress from the year before, a new national report has found.
And while at least a dozen of Minnesota’s public companies — led by Best Buy, Ameriprise Financial and Patterson Companies — have better representation than the nation as a whole, the percentage for all the state’s public companies lags behind the national average.
“Adding different perspectives and different backgrounds means you have different and more complete discussions,” said Kathy Higgins Victor, a Best Buy director who has helped diversify her board. “That leads to better outcomes.”
Catalyst, whose mission is to accelerate the inclusion of women at work, found that 19.9 percent of the boards in 2015 were female. If there’s good news in the number, the nonprofit said, it’s that in 2015, 26.9 percent of new board seats at S&P 500 companies went to women.
However, the survey also found that 2.8 percent of S&P 500 companies had no women on their boards, and 24.6 percent had only one woman director.
Joann Bangs, dean of the School of Business and Professional Studies at St. Catherine University in St. Paul, has studied the inclusion of women on the boards of Minnesota-based public companies since 2008.
Bangs’ most recent reports show that Minnesota companies are making progress in adding more women to their boards of directors, but overall only 15.5 percent of the board seats at 100 Minnesota public companies in 2015 were held by women. That includes many small companies with no gender diversity.
Still, 2015 saw the biggest percentage increase in women directors since Bangs started her research. In 2014, 14.9 percent of the seats were held by women. In 2008, the percentage was 14.2.
Bangs points to reports that show that having three women on a board is the point at which boards start to operate differently and better.
“Multiple studies have shown that there is better performance from the board when it is a more diverse group,” Bangs said. “There are better decisionmaking processes and a better bottom line.”
Bangs calculates that it could take until 2021 for Minnesota companies to get to 20 percent female representation on boards and until 2046 to achieve 50-50 gender parity.
Bangs considers companies with 30 percent or more of their board positions held by women as doing a good job.
It is up to the boards themselves and their nominating committees to find candidates.
No Minnesota-based public company has done better than Plymouth-based Select Comfort Corp., which is not in the S&P 500 index but has a 50-50 split on its 10-member board.
Shelly Ibach has been president and CEO since June 2012. When she joined the board that year, she was the third female board member. Now, besides the board representation, women make up 40 percent of the company’s senior leadership.
Ibach said the company needs different perspectives if it is to be innovative.
“We are all pushing for that broader set of candidates to consider,” she said. “Because of that we are where we are.”
Other big Minnesota companies that have done well include Best Buy and Target.
Best Buy’s 10-member board has four women, including two added since 2015.
Higgins Victor has been a Best Buy board member since 1999 and chairs the nominating committee that helps select new board members. A director with deep experience in human resources, she is also a founder of executive leadership and coaching company Centera Corp.
Selecting new board members is about finding the right skill set and cultural fit, she said.
“We’ve been involved in very deliberate board refreshment,” Higgins Victor said. “But make no mistake, it was a concentrated effort to include more diversity.”
There are practical reasons to being more diverse.
Target CEO Brian Cornell joined the Catalyst board earlier this year and Target was one of the sponsors of the Catalyst Awards Conference in March.
Cornell — who worked with well-regarded CEOs Indra Nooyi at Pepsi and Ellen Marram at Tropicana — noted in a corporate blog post that women make up 36 percent of Target’s board and 45 percent of the company’s C-Suite and that their two newest directors are women.
“By striving to create a more diverse and inclusive career environment and workforce, and by being smart and purposeful about the range of products and experiences we bring to market, we help create a better Target for our team and guests — and a better society for all,” he said in the blog post.
Concerted efforts to increase diversity work is the goal, said Tia Gordon, vice president of global communications at Catalyst.
In 2007, Catalyst started a program in Canada that paired women executives with mentors who could help them move into more leadership roles.
“As of this year more than 50 percent of our alumnae from that program have been appointed to corporate boards,” Gordon said.
Catalyst in May launched a similar program called U.S. Women on Board. It is a two-year program in which CEO/board chairs serve as mentors and sponsors with CEO-endorsed board candidates.